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Leeds United: Selling the Whites
With Leeds United on the march again after promotion to the Championship, the club's fortunes off the field are also on the up with fans clamouring to get their hands on all things United.
Grant Woodward reports on the selling of the city's football club.
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Three years ago, in a move sadly symbolic of the club's plummeting fortunes, Leeds United closed their flagship city centre souvenir store.
The seventh and last of their offshoot shops and concessions to get the chop, the shop on Albion Street had opened on the day United were drawn to play Real Madrid in the Champions League.
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When it closed, Leeds were about to sink to the third tier of English football for the first time in their history and owed the Inland Revenue 2.5m.
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Today, United are preparing for Saturday's visit of Derby in their opening fixture of the npower Championship, the club's finances are back on an even keel and supporters can once more face the future with hope.
One thing that hasn't been resurrected, however, is the club's fleet of shops. There is one at Elland Road and an online store, but nothing else.
But if you think that means United's retail operation is still in the doldrums you would be quite wrong.
The enduring appeal of Leeds United means there remains a lucrative market for anything and everything that bears its branding and, crucially, when it comes to this valuable source of revenue, it seems the club is finally getting it right.
"Off the field we're definitely one of the biggest teams in the country," says Daniel Jeffery, standing amid the sea of mouse mats, mascots, furry dice and flip flops that fill the Leeds United superstore at Elland Road.
"We've made a profit every year since I've been here and retail-wise we're in the top six or seven clubs in the whole of the UK."
The bubbly and likeable southerner who has worked for several blue chip companies, arrived at the club as head of retail in 2002 to provide the hard-nosed business savvy United had been so sorely lacking.
At the time the club were still in the Premier League and boasted seven shops and concessions across Leeds, Batley, Castleford and Wakefield alongside its Elland Road superstore.
With Leeds haemorrhaging money from the Peter Ridsdale 'living the dream' era of gross overexpenditure, he took the decision to streamline the business. Whether through necessity or inspiration, the move to downsize paid off.
"I love football and I'm a football fan," he says, "but when I came here it seemed to have been fans running the business and we needed to make some hard decisions and look at things objectively.
"I reorganised the business, it had millions of pounds tied up in stock
and eight stores expense in terms of rent, rates, staff costs. We made some savings well into the seven-figure mark and that money went straight into the bottom line. Now we've just got one store and an online business, but we've doubled the profit we were making in the Premier League.
"We built on the products and improved on them. There's a strong retro range now, whereas prior to me joining we had virtually nothing. These are all growth areas for us. The idea is always to bring in new products that our fans want."
If the shelves, racks and displays of the Elland Road superstore are anything to by, the fans want just about anything you can think of.
As well as the usual array of replica kits both current and retro, there's everything from iPod covers and car mats to dog collars and dartboards. You can even kit out your offspring in their very own Leeds United baby grows.
The golfers among the Leeds support are well catered for with United-branded headcovers and balls sporting the famous club logo, while the size of United's foreign fan base is reflected in Leeds flags that incorporate the Irish and Norwegian national flags.
In one corner of the store there even sits a small army of Leeds United gnomes. Jeffery admits he isn't a particular fan of them but says they sell in their thousands.
Such sales are worth their weight in gold for football clubs, particularly one like Leeds that is still striving to rebuild in the wake of past debt problems.
United's retail arm recorded a 1 million turnover in December last
year, which Jeffery says is more than clubs like Bolton and Birmingham manage in a season.
Figures released by Companies House in April showed that in the last financial year United's income from merchandising rose by just under 1.5m to 4.9m.
It may be relatively small fry compared to the likes of Chelsea or Manchester United but, significantly, it helped Leeds turn an operating loss of 1.6m into a profit of 15,000.
This season, Leeds have been boosted by record shirt sales, helped by the popular return to the traditional all-white kit introduced by legendary manager Don Revie shortly after his appointment in 1961.
More than 12,000 replica tops were snapped up within a month of United unveiling their new kit at the start of May, while the new away shirt launched at last weekend's friendly win over Wolves is also selling well. At 40 apiece, that represents a welcome windfall.
"There's no doubt that the momentum of us going up has helped sell a lot more shirts than we would have done if we'd stayed in League One," says Jeffery.
"But the business model here is based on us doing well even without the club doing that. If the team gets promoted or wins a trophy that's the cherry on top of the cake.
"When we beat Manchester United in the FA Cup we produced a T-shirt and sold 5,000 of them on the back of that win. There was also a DVD. We wouldn't normally do that, but then it's not every day you beat Manchester United at Old Trafford.
"The beauty of the DVD is that because we've got our own TV studio with LUTV (the club's online television station) we handle all our matchday content so we were able put it together ourselves. We don't want to fleece the fans, we want to put good products out there."
One decision United took was to sell the team shirts exclusively through the club shop and its website. It goes against the policy of the Premier League heavyweights, whose kits dominate the racks of high street sports retailers, but Jeffery insists it's working.
"In terms of shirt sales we probably fit into the top seven or eight clubs in the UK," he says. "We decided that we wanted to control that replica market in order to ensure all the revenue comes directly back to the club.
"That might not always be the policy, and you can still buy Leeds United products in places like JJB Sports, but you won't find the official shirts because we want to channel everyone through the club in order to maximise our return."
The success of the retail operation is reflected in the fact that serious consideration is now being given to reopening an offshoot store in the city centre at some point in the future.
Meanwhile, the plans for the redevelopment of Elland Road's East Stand include the creation of a major new superstore. At 11,000 sq ft it will be spread across two floors and equivalent to double the size of the existing shop, which is set to make way for a hotel.
Jeffery says such expansion is justified by the turnover of the retail business and the continuing demand for the products it sells.
"There used to be a shop that opened in the early 1970s selling scarves, badges, rosettes and rattles," he smiles. "The market has become a bit more sophisticated these days.
"One of the big advantages is that we look to source products from all over the world which means we can be a bit more aggressive on price. We also take a close look at what other clubs are doing and, in some instances, share suppliers.
"The fact is we need to make the club pay 365 days a year so we need to maximise the revenue we're bringing in. The whole ethos is that rather than just making the club pay 23 days a year on match days, we make it pay all year round."
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Friday 25 May 2012
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