Fanatics chief’s growth goal for Kitbag

THE boss of the US company which has just bought sports e-commerce business Kitbag is pledging to give it the investment and focus it needs to grow into a company generating “many hundreds of millions of dollars” in sales.

Doug Mack, chief executive of $1bn Silicon Valley enterprise Fanatics Inc, was speaking after spending five days in  the North West based at Kitbag’s  Middleton offices, where he held a series of meetings with executives and outlined his vision to all 500 staff.

After a lengthy on-off disposal process Kitbag was finally sold on February 2 for £11.55m by Findel, its listed former parent company, to Fanatics. In the year to March 2015 Kitbag made a loss of £1.2m on sales of £74.48m.

Mack told TheBusinessDesk he has been very impressed by the “passion and expertise” of the staff at Kitbag and also by the hugely positive reaction from them to the change in ownership.

“I have seen a willingness to change, which is important. They have been through a lengthy and public sale process with lots of twists and turns and I wanted to see whether they could put that anxiety in the past and focus on the opportunity ahead.”

He said Kitbag, which runs e-commerce and retail activities for leading football clubs such as Real Madrid, Manchester City, Manchester United and Everton, had not received “the appropriate investment or expertise” from Findel to “grow at the pace it’s capable of”.

His strategy is to target ‘low hanging fruit’ by selling more for Kitbag’s customers, developing new merchandise ranges for the clubs and creating a better experience for customers by deploying Fanatics’ digital marketing and data-driven expertise.

He said rapid revenue growth would take Kitbag into profitability as it would not have to increase its cost base radically to fulfil higher sales.

He is convinced Fanatics – which is investing $80m in its technology platform – can help Kitbag and its commercial partners penetrate the US sports market too, and says he hopes more clubs follow Manchester City’s lead in launching a sister club in the US.

“It’s a brilliant and exciting strategy, and I hope to see more European clubs do this. Fanatics will be their natural partner if they do as we run Major League Soccer’s e-commerce business so it’s a natural synergy.”

He said Europe had been on Fanatics’ radar for some time and Kitbag was an excellent opportunity for it to acquire and build, rather than start from scratch.

“I think Kitbag was unique – no other business in Europe has the scale and the commercial relationships it has.”

He said ideas would be shared from Kitbag to Fanatics and vice versa, to help each business grow. “I will be here quite often and I expect people from Kitbag will be in the US a lot too. I believe that cross pollenation is better than one way traffic.”

Mack cut his teeth with industrial giant General Electric and then worked for consultancy McKinsey. This led him to e-commerce and then Fanatics – which is owned by Kynetic – privately held company run by billionaire e-commerce entrepreneur Michael Rubin.

He added: “I told the staff that success will be 10% inspiration and 90% perspiration and it’s time to execute this and realise the potential here.”