ACROSS U.S., GOLDEN KNIGHTS MERCHANDISE SELLING WELL
market and competition for discretionary dollars lead to merchandising ranking last in Pwc’s financial projection among the four major revenue streams in professional sports, placing behind gate revenues, media rights and sponsorships at 1.4 percent annual growth through 2020. Brick-and-mortar retail also loses sales to online shopping every year.
The Golden Knights will fight these downward trends using the unique emotional connection sports creates with fans. While maintaining a local online presence, Golden Knights officials want you to come to a game and cheer with your friends, then stop by the merchandise shop on the way out while the high of victory still lights up your brain.
“There is an emotional connection with a consumer and a brand and a team, creating an environment in-store that gives a nod to that,” said Adam Jones, a PWC director who oversees the firm’s yearly sports study. “That certainly can influence or elevate a consumer’s likelihood (to buy) or level of spend.”
Golden Knights officials recognized that opportunity and partnered in December with Rank + Rally, the merchandising arm of Levy Restaurants, to design and operate The Armory. While the team also will run an official shop at Mccarran International Airport and a mobile truck, the 2,600-squarefoot space at T-mobile Arena will determine much of the team’s bottom line in retail.
“This stream, more than any other, is so closely aligned to the tickets that we sell,” Golden Knights President Kerry Bubolz said. “That’s why it’s so important that we do well in terms of our ticket revenues because those are captured audiences when you have those 44 games a year when people are already here in the arena and they’re coming in and buying product.”
Retail, concessions and parking comprise the second tier of revenues for the Golden Knights, Bubolz said, with ticket sales, sponsorships and media rights constructing the top group. The team sold nearly 14,000 season tickets and plans to offer about 1,000 single-game tickets per contest starting later this summer.
The Armory opened last month, a day before the Golden Knights debuted their inaugural jerseys during NHL Awards festivities in Las Vegas. An interest list for the $195 jerseys — $265 customized with a name — began last week, but fans must go to The Armory or call the team to place an actual preorder. Abouzeid declined to provide preorder sales figures, but said the numbers track with the team’s projections and the interest list received “thousands” of submissions.
Once available for sale in the fall, the sweaters will become the most expensive items at the arena store. The jerseys will not be exclusive to the shop, but more than 100 other items will only be sold at T-mobile Arena or through the team’s merchandise website.
The enhanced in-store experience and exclusive merchandise lead the team’s plans to capture as many local sales as possible. What is sold in Vegas stays with the Golden Knights, while revenue from merchandise purchased through Nhl.com or league-authorized retailers must be shared equally with the other 30 teams.
Little is revealed about overall NHL retail sales figures, as merchandise rolls into a larger pool of money known as hockey-related revenue that teams split as part of the collective bargaining agreement. NHL spokesperson Jennifer Neziol declined to provide retail statistics, but praised the work of the Golden Knights.
“The Vegas Golden Knights merchandise has been doing well nationally,” Neziol said. “There’s been a steady demand, and the product assortment on shop.nhl.com will continue to expand in the coming months, with jerseys being available in September.”
PWC estimates 40 percent of pro sports teams maintain an in-house retail operation that allows club control of inventory and pricing. With a captive audience in the arena, the team can charge premium prices in a shop Abouzeid said “rivals any Madison Avenue boutique.”
“It’s one of their top revenue streams for most sports teams,” said Erin Jones, senior vice president with Rank + Rally. “It is a critical piece of their business from a financial contribution standpoint, but also from brand expression, I’d say it’s the primary touchpoint and the most controlled facet of their brand that directly interfaces with the fans.”
That brand relies on equal parts “Vegas” and “Golden Knights” as the team attempts to honor the mascot chosen by owner Bill Foley while tapping into the power of its home location on the Strip.
“What I want this store to be is, this is going to be the new Vegas souvenir that tourists take home,” Abouzeid said. “They’re not going to buy fuzzy dice anymore, they’re not going to buy ‘I Love Vegas’ T-shirts. We want them to come in and buy a Vegas Golden Knights T-shirt.”
To sell that shirt, Abouzeid must draw people to his store. He hopes the sensory experience and custom touches of The Armory accomplish that.
“I learned a lot from Steve Wynn and also (during) my days at Venetian,” Abouzeid said. “You’ve got to sell experience. Mr. Wynn is great at selling experience. To some degree, the retail here is not selling commodity product — it’s selling a fan experience.” adam.candee@gmgvegas.com / 702-324-8368 / @adamcandee