Scott Molander, who with a partner launched the chain as Hat World with a single store in Tippecanoe Mall in Lafayette in 1995, runs Lids Team Sports and will continue to run the business under its new owner, Memphis, Tennessee-based Varsity Brands.
Varsity Brands is the owner of Herff Jones, the class ring-maker founded in Indianapolis 95 years ago. The deal positions Varsity to capitalize on its deep relationships at high schools and other educational institutions to bolster sales of uniforms and sports equipment.
Terms of the sale were not disclosed, but the parent of Lids Sports Group, Nashville, Tennessee-based Genesco Inc., said in a regulatory filing that it will record a $10 million to $15 million gain on the transaction.
Genesco once viewed team sports as a huge growth engine. At an investor conference in 2010, Genesco CEO Robert Dennis said team-sports equipment is perhaps a $5 billion segment “serviced by 5,000 team dealers who are in our judgment astonishingly unsophisticated, particularly in their lack of use of technology.”
But the results of Lids Sports Group’s diversification strategy have disappointed analysts, and Dennis said in a press release late Tuesday announcing the sale that the company is reversing course. He said the sale allows “Lids Sports Group to sharpen its strategic focus on its core business, giving full attention to execution and realizing the growth potential in retail and (online).”
Genesco does not break out the financial performance for Lids Team Sports. But Lids Sports Group overall continues to produce enviable financial performance. The company—which operates more than 1,300 stores under its Lids, Lids Locker Room and Lids Clubhouse formats—generated operating earnings of $49 million on sales of $903 million in the fiscal year that ended in January 2015. For the year, Lids Sport Group accounted for 32 percent of sales for Genesco, which operates a broad range of retail chains.
Genesco said Lids Team Sports will fold into BSN Sports, a division of Varsity Brands selling team uniforms and apparel that’s based in Dallas. All of Lids Team Sports’ employees will transition to BSN. The number of employees was not immediately available.
Lids Sports Group recently relocated its more than 400 corporate employees from Park 100 to a new, $22 million headquarters in Zionsville. When Lids announced the project in 2014, the company said it planned to add more than 750 workers by 2025.