The world’s largest seller of licensed sports apparel is using money from a recent funding round to expand its headwear business.
Fanatics is buying a handful of assets from Vetta Brands, including the headwear-licensee Top of the World and its rights to more than 600 universities. It is also taking over the brand’s 220,000 square foot warehouse in Norman, Okla., which will become the base of Fanatics’s headwear business.
Fanatics recently raised $350 million and has additional cash to pursue acquisitions at a time when many in retail and manufacturing are struggling. Vetta is one of those companies. Top of the World ceased operations in August, and Vetta has begun liquidating assets.
Fanatics says it will revive the brand and plans to re-hire more than 200 people recently laid off because of the liquidation. Top of the World President Scott Shuler will join Fanatics and continue to oversee its operations.
In addition to the purchase price, Fanatics said it is paying off factory liabilities and royalties owed to schools on merchandise that was already produced. Terms of the deal were not announced.
Fanatics plans to use the acquisition to deepen its headwear business. The approach will be similar to what the company built around t-shirts and other apparel, a network in which designs are made and products are shipped in a matter of minutes and hours as opposed to days and weeks.
Over the past decade Fanatics has used that speed to become the dominant force in licensed sports apparel. It has partnerships of various types with every major U.S. league, and it works with more than 200 pro and collegiate teams.
Acquisitions have been an important part of that strategy. In 2017, for example, it purchased VF Corp.’s licensed sports group, which included Majestic, for $225 million. That same year, it bought licensing agency Fermata Partners, which became the foundation for Fanatics’s college division. The company bolstered its growing memorabilia arm last year when it bought assets and inventory from Steiner Sports.
As part of the Vetta deal, Fanatics will assume Top of the World’s licensing rights, including some in apparel. The company said more than 600 of those schools have consented to having Fanatics take over.
Owned by billionaire Michael Rubin, Fanatics was valued at $6.2 billion in that most recent funding round. It is expected to be the company’s last round of financing before a potential IPO.
(This story has been updated with details about Fanatics’ warehouse in the second paragraph).