Sales Of NBA Items Hits Stall
NBA Properties has predicted double-digit gains for its licensing business this season, but retailers say the league will not come anywhere close to equaling its sales totals of two years ago.
"It's certainly not back to pre-lockout numbers," said Bill Townsend, general merchandise manager at The Pro Image, the nation's largest chain of licensed product specialty stores.
With the team apparel market having endured its worst Christmas sales season in nearly a decade, NBA attendance down and memories of the lockout still fresh in some consumers' minds, retailers say NBA sales are only slightly above where they were a year ago, when the labor dispute kept players off the court.
But the primary force behind the decline is the retirement of Michael Jordan, most retailers said.
"As good as the NBA business was, it was dominated by No. 23 and one team," Townsend said.
By some accounts, the Chicago Bulls and Jordan made up nearly half the NBA's apparel sales. With the Bulls now a cellar-dweller, that business has simply evaporated.
The league won't say how much its business declined last season, but the most common estimates are that the NBA's licensing revenue was down 50 percent during the lockout-scarred campaign. Worldwide retail sales likely came in at a little more than $1 billion, well below the nearly $3 billion the league reported back in 1996. Sales had been in decline for two years even before the lockout and Jordan's retirement.
Almost no one expects the league to get back to its high-water mark in the foreseeable future.
"Can it come back? Yeah. Can it come back to Jordan numbers? That's asking a lot," said Cesar Lucero, a buyer at the Just For Feet chain. "Pre-lockout numbers weren't great, either. What made the pre-lockout numbers was selling Jordan jerseys. I think they need a marquee player, someone the NBA can jump on the back of."
Although no individual player can come close to replacing Jordan, such young stars as Kobe Bryant, Kevin Garnett and even the Los Angeles Clippers' rookie Lamar Odom are picking up some of the slack.
"There's some new young guns out there," Townsend said. "Our NBA replica jersey wall has 10 or 12 different players now. There's some freshness to it."
The league does not expect another team or player to emerge that can carry half its business but hopes to see gains come from a variety of sources, whether that be new players or entirely new channels to sell products.
"We realize we've got to build it back bit by bit," said Chris Heyn, senior vice president of consumer products at NBA Properties. "It's been tough to gain confidence back. If you had a tremendously robust retail environment, it would still be tough."
Today's retail environment, however, is anything but hospitable to licensed products, especially the NBA following the lockout.
The licensing industry's greatest challenge remains the outerwear market. Once the largest team apparel category, outerwear has been felled by three straight years of temperate fall weather in the Northeast and a general fashion shift away from oversized team jackets.