Sports-mad Australians with a passion for hats have inspired US apparel business Lids to expand its local bricks-and-mortar footprint, as it aims to cash in on the rising popularity of NBA and NFL in the country.
Lids, which sells more than 30 million caps per year globally, has a strong following among sports fans for its range of officially licensed hats and clothing for sporting codes, including the national basketball, football and hockey leagues in the United States.
It’s the place to snap up a Boston Celtics cap, a New York Yankees jersey or an LA Lakers satin jacket. The brand’s owner, Lawrence Berger, says it was the sporting leagues that Lids works with that urged the retailer to bring its brand down under.
“They kept saying to us, you’ve got to go to Australia, it’s just a wonderful market. It’s a sports-crazy market, and there’s a hat culture there,” he said.
Berger is a partner at Ames Watson, an investment vehicle founded with Thomas Ripley that was inspired by legendary investor Warren Buffet’s fund Berkshire Hathaway.
The firm bought Lids from footwear retailer Genesco in 2019 for $US101 million ($148 million) and decided to reinvent the business, including making the sports caps and jackets it sold more fashion-focused, so they could be more easily worn outside the stadium.
The COVID-19 pandemic helped the group accelerate its growth, with the rise of the athleisure trend – athletic clothing typically worn as everyday wear – making it more acceptable for people to don a sporting hat in a wider setting.
“Every time I used to meet with my lawyer, he used to wear a suit. Now it’s totally appropriate for him to be wearing a hoodie and a hat to that meeting. People are trying to express themselves, they are more fashion oriented, and sports is growing, growing, growing,” Berger said.
As the group was building momentum across the US, Australian sports fans were also taking notice. “We started to get lots of requests. We would get emails from people saying, ‘are you opening in Australia?’” Berger said.
Lids subsequently dipped its toe in the local market, as the operator of the NBA merchandise store in Melbourne’s Emporium, last year. Another NBA site is now open in Sydney.
Ames Watson has been building up a bricks-and-mortar presence for the Lids brand in shopping centres across the country, and will hit ten stores this year. Berger says there are plans for more store openings beyond this too, given Australia has been the most successful international market the business has launched in to date.
He says this is because Lids can offer merchandise for the US sports Aussies follow closely, and these goods aren’t available anywhere else.
“There are Australian NBA players, there is a lot of viewership,” he said. “What people can’t get a lot of [in Australia] is an NBA product, is major league baseball product.”
NBA viewership has been steadily growing in Australia over the past five years, and fans are following a growing cohort of Australian stars in the league like Ben Simmons and Patty Mills.
“We don’t think that anyone has seen a hat wall like a Lids hat wall in Australia,” Berger said.
Consumers have been hitting local shopping centres hard over the past few months, but there are fears that a spending cliff is on the horizon after a year of rising interest rates and inflation.
Lids is upbeat about the opportunities on offer for bricks-and-mortar stores, however.
“The goal is that [Lids] should be a really interesting shopping experience. A hat is something that people want to try on – it’s something that is a wonderful brick-and-mortar product,” Berger said.
As an avid sports fan, he’s also got one eye on the AFL and the passion that Australians have for the local game. Lids is hoping to expand into offering more AFL products in future.
“I’m hoping what we can do with that product is similar to what we have done with NBA and baseball and the NFL. That we can start to take the product and make it more fashion-oriented.”
The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.
Source: Thanks smh.com