Fanatics, Lids raise stakes in Barnes & Noble college bookstores
Sports merchandise giants Fanatics and Lids are beefing up their investment in the Barnes & Noble Education college bookstore chain as students head back to school following more than a year of lockdowns and remote learning.
Having formed a joint venture last December when they made a $15 million investment in Barnes & Noble Education, Fanatics and Lids increased their stake in the company last week to more than 5 percent, according to a securities filing.
“We think the bookstore business will be particularly good this fall because there is lots of pent up demand,” Lawrence Berger, chairman of sports cap company Lids, told The Post. “We have been building our share in the company over the last quarter and will likely add to our position.”
In December, the joint venture scooped up 2.3 million shares. The most recent purchase of 1.15 million shares pushed them over the 5-percent threshold, Berger said, declining to say how many shares in total the venture owns.
The bookseller’s shares on Thursday were recently off more than 5 percent at $7.17, giving it a market capitalization of $370 million.
In June, Barnes & Noble Education inked a deal with the crown jewel of college merchandise, Notre Dame University, which left its longtime retail partner, Follet Corp. Barnes & Noble Education and Follet Corp — a privately held, 148-year-old company based in Westchester, Ill. — are the two biggest players in the college merchandise market, according to experts.
The loss of the Fighting Irish — which outsells every other college and university in merchandise — was a blow to Follett Corp., which also provides educational products to grade school children and libraries.
The $3.1 billion company has been quietly shopping itself and retained investment bank Morgan Stanley earlier this year to lead the process, according to a source with knowledge of the situation.
The company did not immediately return calls for comment.
Fanatics — the sports licensing company led by billionaire Michael Rubin who also co-owns the Philadelphia 76ers and New Jersey Devils — is running the online commerce business for the 775 college and university bookstores Barnes & Noble Education controls.
Lids, meanwhile, is in charge of the merchandise in the stores that bears the logo of the school or school team. Barnes & Noble Education handles the book portion of the business and operates the stores.
Fanatics has a 50-percent stake in Lids, which operates some 1,700 stores mostly located in malls.
This year, the partners have added more branded merchandise to the college stores, including deals with Lululemon and golf brand Peter Millar, which have contributed to sales increases at the stores, Berger said, adding that school book stores are one of the few bricks and mortar retailers that still do a small portion of their sales via e-commerce.
“About 90 percent of the sales are happening in the stores,” he said. “But with Fanatics handling the e-comm business there are more opportunities to reach alumni.”
The college retail division was spun off from Barnes & Noble in 2015, becoming a separate publicly traded company while the larger bookstore chain was taken private last year by hedge fund operator, Elliot Management.