The Perils of Flogging Football Shirts

The partnership between Sondico and Pompey FC has become a subject of great controversy. I am not going to say anything here in the way of “trade secrets”. Nothing I say here is intended as criticism of the club; on the contrary, those in charge were right to sign the deal with Sondico based on what everyone knew at the time.

I worked in two stints on PFC’s retail and kit operation, from 2007-10 (when Canterbury supplied the kit) and again from 2011 to the spring of 2013 (when it was Kappa). I had worked in retail ever since I left university, starting out as a picker in a warehouse and eventually becoming a product manager. I had a fateful phone call from someone I knew who was working at Pompey asking if I wanted to apply for a job. I stupidly said “yes”.

The team I joined inherited a huge overstock problem to deal with, a lousy kit deal which meant we were buying shirts in for more than we should have been, and an inefficient online retailing partnership with a third party. We got on with turning things round, and given the chaos that was in the air generally, I think we can be proud of our efforts. But when I started there was still a sense of great opportunity in the air if a buyer for the club could be found. Stadium plans were still being worked on and there was talk of a World Cup bid.

As soon as we start to examine how the business works, we encounter the First Law of Football Shirts: “a football club will never have the right quantity of football shirts”. You may well have too few, because you are too timid with your order; because someone in your Marketing Dept gives them away knowing they don’t have to pay for them; because the players give them away and the kit man has to “borrow” your stock; because the team unexpectedly flies off with the title and you can’t get them from the factory as quickly as people are snaffling them up; because the team is in administration and you can’t buy them anyhow; because the supplier is in administration and creditors are arguing over your stock; or because your supplier is hideously incompetent and is operating out of a lock-up in Swansea.

More likely, you will have too many, because even though you have been prudent with your order, an idiot will overrule you and order more without telling you; because they will arrive late or without sponsor’s logos and the lost time sorting it means lost sales; because the team plunges towards relegation so nobody buys it; because a container of stock you didn’t know about turns up;  because the retail price is high and someone else doesn’t want to accept lower margins; or because your supplier is hideously incompetent and is operating out of a lock-up in Darlington.

All of these things have happened in the history of Pompey, and more I haven’t got room for here. Pompey are by no means unique in the game, or in retailing, in having episodes of bad luck or incompetence. However, the container story is a classic. At one time, when the club shop was based in the former Pompey pub, a load of stock was ordered at the start of the season, the team had one of our unexceptional years in the second tier, the club had its Xmas sale, stock seemed to have cleared through, and that was that. Then someone got a phone call from a freight forwarder in Middlesbrough asking when the club wanted their other container delivered. There had been a change in management of the club shop at some point in the season, nobody was sure what stock was left, and nobody seemed to know why there was another container of stuff on Teesside, but there it was, bought and paid for out of Mr Mandaric’s millions. It had to be sold on.

I was working at Hargreaves Sports at the time, and we used to sell Pompey shirts and other bits and pieces in our stores around Portsmouth. The call was to find out if I was interested in splitting a container of Pompey Chambray shirts (they were nice, I bought one) and chinos with PFC crests on the pocket. In the end, we passed it up and the last of it was cleared for a pittance in a special clearance sale in the Victory Suite a year or so later. Mandaric then brought in Barry Pierpoint, who actually did know his stuff, but who then got sacked in a power struggle which would, in the Twitter era, “rock the club to its foundations”. For all his complaints about inheriting a “Mom and Pop shop” when he took over Pompey, in most respects Mandaric was pretty hopeless himself.

But I digress…the First Law of Football Shirts means that it is very difficult to say how much (if any) money you are going to make out of the operation. There are things you can do to maximise the possibility of profit:

– Plan to get the kit in as early as possible ahead of the new season to allow for logistical problems

– Sell as much of it as early as possible, before the team starts to slide towards relegation and nobody wants to buy it

– Pay attention to design and quality, because not even ardent supporters will buy shoddy tat for long

– Make sure you tap up your supporters in the far-flung corners of the Empire with online sales (a sizeable percentage of Pompey’s online sales in my time there were to expats and emigrés, and a surprising percentage were to people who can only have had exposure to us on TV in the Premiership)

– Don’t just sell them shirts, sell them lots of other accessories and bits which (and here is, perhaps, a bit of a trade secret) tend to make you much more profit

Sondico don’t seem to understand the First Law very well. The Second Law of Football Shirts is “you can please some of the people none of the time, or none of the people all of the time”, even if you follow the points I make above. This is where the commercial realities meet the sometimes idealistic beliefs of fans. Fans often have it in their heads that flogging football shirts is a lucrative business, and that profit margins for clubs or shirt manufacturers are enormous. Consequently, they will assume from the outset that you are incompetent or a crook if in any way you fail to satisfy them.

And you will fail to satisfy them, because no two fans agree about “what the shirt should look like” beyond it “not being red and white stripes”. Some fans prefer a collar, so it can be worn like a polo shirt. Some fans prefer a v-neck. Some fans prefer a crew-neck. Every supporter has a favourite shirt from the past they want to re-create, every supporter has an idea for a new design. Some of the people are going to be pleased none of the time, even if you are actually quite good at what you do. That’s life.

To please none of the people all of the time, fans or club, you need Sondico. The first shirt they did for us, that fantastic “royal shirt with a bespoke white wave to reflect our naval history”, was in fact the previous season’s “Dagenham shirt with a bespoke white squiggle to commemorate the flowing lines of the Mk III Ford Cortina”. I don’t know why they made up the bit about the wave. Trust issues at the start of a relationship are a bad sign. Most of us would have been happy, but for the fib, to give them credit for getting a shirt done at all in the gap between the takeover of the club starting and the beginning of the season.

Then we had the fiasco of this season’s shirt, with poor and late availability, quality issues, and a general feeling that the club isn’t getting the service it deserves. There is a very good piece from Stand fanzine by Carl Paddon and Bob Beech which goes into more detail on the problems the club have had as a result. Some fans have questioned Sports Direct’s policy of sticking RRPs on products in order to show a discount. In the case of a club’s football shirt made by a business in the Sports Direct family and where the club franchises the retail operation to the same business, there is no sense in which the club “recommends” the price at all. It is a bogus discount, but one which doesn’t quite fall foul of trading standards legislation.

I have every sympathy for the club management, who have done as much as they can to nag Sondico into behaving like a competent supplier. The club has done as much as it can to engage with fans on the issue. It offered supporters a vote between different options of kits. But when two of Sondico’s options are very average, and a third is hideous and blatantly uncommercial, it might have been better if PFC had taken the decision “in house”.

Sondico had for years made shirts badged as Vandanel and done well enough with a number of teams in the league. While one or two things I heard were mildly discouraging, Sondico were prepared to pay a “minimum guarantee” as part of the deal. At the time the deal was done, there wasn’t much (if any) guaranteed revenue. You can’t fault the club for that, or for doing a deal in which the risk of running the shop is left to someone else. At that time, I don’t suppose PFC would have been in a position to take over the lease on the Megastore, or Sports Direct (Fratton) branch as it has now become.

Retail is a risky business, and we should balance fans’ expectations against commercial reality. Many fans forget that whatever profit you make on a shirt has to cover a huge number of costs over and above that of the shirt itself. Let’s take the last Canterbury home shirt as an example:

Retail Price £40.00    Cost Price £18.50  Profit ex-VAT =(40/1.2)-18.50=£14.83

Out of that £14.83 you have to pay the rent on the shop, all your bills, business rates, staff wages, the window-cleaner, credit card transaction charges, your EPOS support service charge, and so on. The running costs of a “bricks and mortar” retail operation are enormous. And of course, over the course of a season, your actual average retail price is not £40, because you reduce the last “X” quantity to clear at a tenner or whatever. The final nett profit on a shirt is nothing like the notional gross profit (i.e. the £14.83) because of all the other costs that feed into your overall P&L and the markdown that inevitably has to be applied to clear “terminal stock”.

There’s also the general grumbling about the price of football shirts. As I’ve shown, at £40 you aren’t necessarily making a lot to start with. And a shirt at £40 is costing about the same as it did almost twenty years ago. I think the Pompey shirt hit £40 when it changed from Asics to Admiral in 1997. £40 sounds like a lot, but take any other part of the “experience” as a supporter, and it will have gone up a lot more in that period of time.

The logistics of football kits are complex, but they work to a predictable pattern. If you are having your shirt made in the Far East, the earlier you get your order in during the previous season, the sooner you’ll have the kit. Get it signed off in October, and you should have it in plenty of time, maybe even right at the end of the current season. This season’s “Pompey Pals” commemorative kit was signed off in Autumn 2013, but sadly it only appeared at the beginning of August 2014, already a month (and arguably more) late, and, as Mike Fulcher protested at the Pompey Supporters’ Trust AGM, was not available in smaller kids’ sizes.

Having the names of the Pompey Pals on the shirt makes the production process a bit more complex, but not much. Other teams have done it before and got their shirt launched on time. We nearly did it once before at Pompey when CSI were desperate to raise some cash and sell the spaces on the shirt (we managed to stall that one). There have been reports – as Neil Allen details in this piece in The News – of similar delays to Sondico kits at other clubs. Everyone in the business should understand the timescales and production logistics. There are none of Donald Rumsfeld’s “unknown unknowns”.

Sometimes fans succumb to “grass is greener” reasoning, especially when our kit is made by Sondico and there are brands like Nike and Adidas in the marketplace. The problem with a larger brand is you have little or no input into the design process. We all laughed at a side in Hampshire who have never own back-to-back League titles a couple of seasons ago when they started turning up in what was basically the same Adidas shirt design as Bristol City. The days when brands would shell out hefty sums to football clubs in sponsorship deals have gone for all but successful higher division clubs. You might get a deal that gives you a basic shirt at minimal cost but they won’t do much else for you. You’re not a major concern. And Bristol City weren’t laughing when Adidas screwed up delivery of their shirts this season.

Fans care about football shirts not just because they want to buy and wear them, but because of pride in their club. “Brand” is a dirty word in football, but that is what it is all about. Your brand is not what you tell customers (or supporters) it is, it is what they tell each other it is. When you’ve got problems such as those Sondico have caused, they affect the club, and not just Sondico. Sometimes the supporters’ expectations are on the idealistic side, but you just have to live with it, and make the points about “commercial reality” to them when the atmosphere permits.

For a football club in Pompey’s position, selling football shirts is really a marketing operation. It isn’t going to generate enough profit to have a transformational effect on the club as a whole, but it is a key part of marketing the club. Sometimes bad luck strikes and it costs you money (Canterbury going bust in one week in July 2009 rather than three weeks later cost PFC around £200k in the end, when it needed every penny) and you can’t do anything. But it looks to me as if the situation Sondico have dumped Pompey in is not bad luck, just bad management on their part. They will still have to pay up, but no money in the world can buy back lost goodwill if they have damaged the club’s reputation.

Finally, Merry Xmas. Especially to Hereford United fans, who have had the same miserable, but sadly usual, lack of support from the FA. Hopefully 2015 will be the year that flaccid and rotten organisation is finally exposed to a bit of “revolutionary justice”.

This entry was posted in Football. Bookmark the permalink.