WHP Global may have lost out on its bid to buy Reebok, but it was able to snag another high-profile sports brand: Lotto Sport Italia.
The New York-based brand management firm, which also owns Joseph Abboud, Anne Klein and a controlling interest in Toys ‘R’ Us, today will reveal that it has purchased the intellectual property rights globally for the Trevignano, Italy-based sports brand. Terms were not disclosed.
LSI, which was founded in 1973, has been owned since the early 1990s by its current chief executive officer, Andrea Tomat. Lotto has a long history in tennis and soccer and its double diamond logo is ubiquitous on apparel, footwear and accessories that have been seen on professional athletes such as tennis Grand Slam champions Martina Navratilova and Boris Becker, as well as a variety of sports teams. It has sales of some $400 million globally, is distributed in more than 100 countries and dresses more than 40 soccer teams and 500 athletes around the world, including tennis player Matteo Berrettini, currently ranked number eight in the world. He wore Lotto during his play in the finals at Wimbledon last month.
Under the terms of the deal with WHP, Tomat will remain with the company along with its current management team to continue to operate the Lotto brand in its core markets of Italy, Western Europe, the Middle East and Africa. Its headquarters and archives in Italy will also be retained, according to Yehuda Shmidman, CEO of WHP Global.
“We bought the IP and licensed back the rights to Andrea for those countries,” Shmidman explained.
He shrugged off the fact that Authentic Brands Group was able to buy Reebok from Adidas for 2.1 billion euros and said WHP is focusing instead on its newest addition and Lotto’s opportunity for growth, particularly in the U.S.
“Lotto is a legendary Italian performance sports brand rooted in priceless heritage that athletes and fans around the world love,” Shmidman said. “We are very optimistic about the brand’s future as we work in close partnership with Mr. Andrea Tomat and the entire team at LSI.”
Together, LSI and WHP will provide design, product development, marketing and brand management services to Lotto’s existing network of more than 50 global partners across the world.
But the real opportunity for WHP, Shmidman said, is in the U.S., where the product is available on a very limited basis. “That’s the huge upside for us,” he said. “You can find it here, but the vast majority of the business is in Europe, Asia and Latin America. We’ll be investing in it big time in the future.”
Shmidman expects Lotto to quickly gain a foothold here because of its quality products and authentic Italian heritage. “Over 500 athletes today wear Lotto, including Matteo Berrettini, soccer players, teams and tennis players from around the world. It’s the real deal.”
Beyond its on-the-field and on-the-court apparel and footwear, Lotto has developed a lifestyle offering, including a women’s apparel capsule collaboration that launched at Zara last month as well as special collections with Primark and Damir Doma.
Shmidman said he expects to very quickly begin signing licensing deals in the U.S. market for performance and lifestyle apparel under the Lotto name. “We’re not going to wait,” he said. He sees the “general athletic apparel” sector as “the biggest financial opportunity” for the brand as this category has continued to gain in importance since the pandemic.
WHP will also expand Lotto into new markets and product categories and will invest in digital channels and partnerships with world-class athletes, the company said. Although Shmidman wouldn’t venture a projection on just how large the brand can be, he said sales can “be much greater” than their current $400 million.
“We believe it’s a major nine-figure opportunity in terms of growth,” he said.
“I am excited about this partnership as it is a key step to ensuring the growth of Lotto, a brand with a great reputation and well-known all over the world,” said Tomat. “With WHP Global we immediately shared the relevance of the values that Lotto brings with it: values linked to sport, innovation, well-being, lifestyle and Italian taste. These are the strengths we will invest in to ensure a growing global presence in key international markets. This partnership is an Italian success, too, because, thanks to an innovative collaboration with WHP, Lotto will be able to compete at the highest levels to become one of the most loved sportswear brands in the world.”
WHP Global was created 25 months ago as a global brand acquisition and management firm backed by equity capital from funds managed by Oaktree Capital Management LP and leverage financing provided by BlackRock. Its holdings account for $3.5 billion in annual retail sales and Shmidman said following this acquisition it is ranked as the 12th largest licenser and brand management firm in the world.
The Lotto deal represents a “great diversification for us,” he said, putting WHP in athletics in addition to fashion and hard goods.
“And we’re still in the early innings,” he said. “We continue to deliver on our mission to invest in great global brands that offer the best opportunities for growth. Our growth so far has been incredible and we have huge aspirations to acquire more brands.”