A detailed photo of fan clothing displayed at NFL Hospitality at the 2018 NFL Annual Meetings at the Ritz Carlton Orlando, Great Lakes, on March 26, 2018, in Orlando, Florida.
Mark Brown | Getty Images
While Fanatics continues to withstand a potential IPO, the sporting goods company is busy expanding its global operations, this time in China.
The company led by Michael Rubin starts Fanatics China, a joint venture with investment firm Hillhouse Capital, an Asian-focused private equity fund with companies in the e-commerce and retail sectors in Asia, the company told CNBC.
Sources close to the deal told CNBC Fanatics that he expects “the only business to exceed a $ 1 billion deal in China.” People asked to remain anonymous because the company does not speak publicly about the financial conditions of the partnership.
With the pact, Fanatics could be getting closer to an IPO. Asked if there was any update in motion, a company spokesman told CNBC: “Although an IPO is clearly a path available to us, there is no update in any time frame.”
Fanatics China will be headquartered in Shanghai and allow the e-commerce center to open its sports licensing market in the country to more than 300 global partners, including Major League Baseball and National Football League investors, as well as various pro teams looking to develops its business in China.
One of the authorized sports categories in China is football. Therefore, this partnership allows Fanatics, which has sales of over $ 3 billion, to better execute e-commerce partnerships with European clubs, including Chelsea, Manchester United, Paris-Saint Germain and Bayern Munich.
Hillhouse was founded by Chinese businessman Zhang Lei and also supports sports retailer Topsports International Holdings, which raised $ 1 billion in 2019 as it listed its IPO in Hong Kong, according to Bloomberg.
Topsports is one of the largest sports retail businesses in China and operates more than 20,000 Nike and Adidas stores.
In 2018, the PE company went through its increase of 10.6 billion dollars and now tried to overcome it with an increase of 13 billion dollars. It would be the largest fund in Asia, expressed in US dollars, according to Reuters.
Quavo plays on stage at the Michael Rubin’s Fanatics Super Bowl Party at the Loews Miami Beach Hotel on February 1, 2020 in Miami Beach, Florida.
Kevin Mazur | Getty Images
Fanatics comes in 2020, when the company raised $ 350 million in an E series (its last round of financing), which increased its valuation to $ 6.2 billion. The Florida-based company has upgraded its parent umbrella with licensed sports goods companies to strengthen its vertical business units, including the acquisition of licensed manufacturer WinCraft, CNBC reported in December.
Fanatics China will use the company’s e-commerce business model and Hillhouse’s local market knowledge in its efforts to grow and maximize online market opportunities, build e-commerce sites for leagues and teams, design and launch new retail stores and develop and manufacture products for Chinese consumers.
With the addition of China, Fanatics is expanding its global presence outside the US, as it also operates in the United Kingdom, Spain, Japan, Germany, Thailand, Australia and India.
Additional Fanatics investors include SoftBank Group and e-commerce firm Alibaba Group, co-founded by National Basketball Association team owner Joe Tsai.