Club moves to clarify Kitbag deal

It seems to me there are plenty with an appetite to do it. Virtually every sporting goods store I walk into in America, and not just in big cities, carries soccer club Shirts. I could walk into the Macy’s on 34th St and buy an Ajax shirt right now.

I reckon Everton must have the lowest growth in revenue excluding TV deal (everyone gets it) and match receipts in the league (although you could argue botching stadium moves is our speciality).

Yet this is being declared a commercial success – it would be funny if it wasn’t so serious. Message to Kenwright: if you can’t sort this out then bugger off, tear up the Kitbag contract, and let some real professionals in.

We are losing an absolute fortune every week thanks to this clown Elstone and I demand he be sacked. Look how well Tim Howard did in the last World Cup, can you imagine the RS or Man Utd Marketing Machines let loose on that one? Half the USA would be walking around in Red Shirts now, it disgusts me to see the youth of this City walking around in RS shirts, take a walk thru Liverpool Airport, trying buy an Everton shirt.... No chance, but there’s RS shirts, hats, scarves, pencils, mugs the lot.... We haven’t got the first clue.

Why is Elstone still in a job?

The club have removed virtually all risk from the equation and therefore they have removed virtually all reward from that same equation.

It typifies an executive team that is worried about the trap door, rather than one that is aspiring to progress.

But no need to worry, it’s being done the Everton Way and we are run by a real Evertonian.

"Pathetic," he said. ’That’s what it is.’ "Pathetic."

The guy is so out of his depth it’s embarrassing. I thought his predecessor, Wyness, was bad... but this bloke??

The continued presence of him as CEO sums up everything which is wrong with our club. Everything.

No matter how he tries to spin it on the OS. The deal is awful and we can’t even get out of it for another four years.

Thanks Bob.

Deals like Kitbag and Chang sponsorship seem very much in the second division of commercial deals in the modern era and whilst I’m not under the illusion that we have the same fanbase and should be on a level with Man Utd, Arsenal or the RS, we should be setting our sights on at the very least competing with the likes of Spurs, Southampton and Barcodes and being a good distance ahead of Swansea, Palace, Stoke, etc.

The concern for me is less that we have second rate deals currently, but more that the commercial management seems to be content and think this is the best we can get. Naturally they can’t say much else in a public interview, but the apparent lack of other options being explored (usually you’d have rumours at least) is somewhat damning.

I would read the whole piece as an admission by the club that we cannot compete with the likes of Man Utd and Man City on or off the park, so we have to accept whatever deal we can get and fans complaining about the situation are not going to have any effect on that outlook. Having said that, 30,000 people spending an average of £100 on merchandise would produce £3m receipts. Which is probably how the club look at the figures in their big picture.

Could it be because the club are run so hand-to-mouth that companies don’t trust the club's cash flow?

Kitbag, Chang, Finch Farm... never mind the stadium – if this was a normal business, people would have been fired a long time ago.

The sad thing about the Kitbag deal is that I think it started in 2009 – one year before the likes of Howard, Pienaar and Cahill would be playing in front of millions at the 2010 World Cup..

Everton in the Community appear to know exactly what they are doing and it makes me feel proud as an Evertonian to have such a well run flagship organisation associated with our club.

The E2 in L1 should be kept open purely for local pride. The existing shop by the ground turned into corporate entertainment.

We have to think outside of the box on stuff like this and not be happy that we are selling a few more kits than Stoke and the likes.

Hence why the club see’s the Chang deal as lucrative. Small thinking brings low reward. Not only did we take the risk away but we have stifled real entrepreneurs from getting involved.

The only reason our CEO finds himself with the title he has, is that Wyness left with large pay-off and a non-disclosure agreement lodged up his arse.

Elstone wasn’t even recruited for CEO, he’s a number cruncher who has accidentally found himself in the best paid position he could ever hope for. He will front for the pensioners, because he’s hit the jackpot.

The rhetoric here is clear: soft-arse blues won’t be able to see through the numbers or business jargon. Sorry, Robert, It’s as plain as day this excuse for a poor, short-term solution to a cash-flow issiue wouldn’t wash with anyone who has any semblance of business nouse.

Then it is imperative to sit down and openly analyse "How can WE do things BETTER?"

But no, it seems that it is ok to have a look over the fence and say, "look, that’s what so and so are doing so we must be doing it right."

Absolute bullshit.

This statement does nothing but demonstrate even further that the club is being run by people who are sadly lacking in basic business acumen.

Can someone tell me that £3m a year for 10 years from Kitbag no matter how much gear is sold is a ’GOOD DEAL’. We are losing an absolute fortune. Imagine if you could sell our merchandise in sports shops all over the world, instead of 2 shops, or online,what our profit margin would be?? Our club is in the hands of CLOWNS.

Translation: - If you don’t like it, fuck off!

This deal stinks and sums up the corner shop mentality at work by these pussies. No idea, no idea at all.

Real people, earning really good real salaries, thought this was really good. They are really wrong and really should not be earning really good salaries.

Somebody worked out that £3M (in the hand) = 30k shirts per year, every year, vs paying out (two in the bush) for a team to sell the stuff.

Karl; bit of an insult to corner shops... can you see Arkwright settling for that... "Granville, fer, fer, fetch a taxi."

Short version; piss up / brewery.

Strange that there are many Bill Kenwright fans and yet he is the man in charge. So it’s a safety in numbers game of bullshit.

No matter what happens on or off the pitch, the fans still go to games, buy the merchandise it will always remain that way, because you cannot unite and take over.

I think as the saying goes, "There’s more than one way to skin a cat" – or Everton, in this case.

No, they haven’t. And no, they won’t.

But to refresh people’s memories, the club claimed their merchandising operation and matchday food & beverage operation was losing a combined £750k a year, so outsourcing it was therefore a good idea.

In one sense it was, but outsourcing for 10 years with no possibility of a review to adjust for market movement was just abso-fucking-lutely typical of this shambles under BK et al.

A few years ago, I became fascinated by the power (the incredible power) of matching kecks and jacket – better known as ’the suit.’

The power of the suit is staggering, particularly when you add shiny shoes, neat hair, a collar and tie and a smile. ("He’s gotta lovely smile..... that Pol Pot.")

Wearing this combination, it appears even the most hapless, hopeless, useless, shifty, corrupt (etc etc) individual can not only make a living, but make a great living. In a suit, some can ’fail upwards’, all the way to the top.

Over the years I’ve encountered thousands of them and as a younger feller, I admit I would often fall under their magical power.

Bank manager: "Well Mr Ruane, it might seem as if you’re right and we have completely fucked up but... look how my jacket is made from the same material as my kecks. And look at my lovely Loakes compared to your cacky trainees."

Me: "Oh... right... yes when you put it like that."

Basically, the suit in business or politics, is a tool to help the hopeless and untrustworthy appear useful and trustworthy – and it works. Is there a ’cure’?

Well I have this picture of this chap my computer.

Link

And whenever I hear a quote from Elstone (or Cameron or Kenwright or Jeb Bush or Andrew Neil or Piers Morgan or..) I just imagine it’s being made by him, then ask myself ’do you believe him?’

And my answer is always ’as fucking if!’

"Suit yourself" is what I say, Mr Magee – or should that be Magoo?

Old Chinese plovub say – ’Neva jyg a sosage by skin’

How can an established Premier League side with an average gate of 35k+ not manage to make more than £3M off merchandise a year? At the very least, I would expect to see Everton merchandise in some of the larger US retail chains given we have their national GK/hero!

What’s the point of going on overseas tours like the US last year and the Asia thing this year if we can’t sell any merchandise anyway? WTF is the point in trying to grow the Everton brand if it doesn’t bring us anything extra?

The real question 6 years ago should not have been should we take the £3M a year instead of lose £750k a year. It should have been why the fook are be making a loss of £750k a year when we have the likes of Howard, Cahill and Pienaar in the side and tens of thousands of fans in the UK, nevermind the rest of the world!

The fact that Everton merchandise can only be found in two stores on the entire planet is simply ridiculous.

I get my wife and self an Evertonian membership every year without fail. My way of subscribing to the club coffers, and ensuring I can get a pair of tickets for matches where I choose.

Every year without fail I have to get in touch with Everton to renew it, no email to ask if I would like to etc etc, even though on a daily basis they will send emails like "Delofeou farted in training, celebrate with 5% off all beach towels".

It is time for Bill to walk into the sunset with our thanks, after appointing a proper commercial team to take us forward. Eugene and Kev Tully at the very least should be on the interview panel!!

People come on here and say they can't buy EFC merchandise... well, let me tell you by the time you have posted you could have purchased whatever you want with home delivery including International. Companies like ASOS have seen massive growth over the last 6 years that the headline retailers (Next apart) are trying to copy, they don't have one single shop and the second and third largest markets are Australia and Russia – all done online.

Having your stock in sports stores across the globe doesn't actually make you more money, especially if (like us) your brand isn't that well known... then you're likely to agree a sale-or-return basis which would leave us holding large stock levels, which isn't productive for a business with no or little cash flow.

If you're a big brand/franchise and your retail partner like Nike takes over, then they do it to promote the tick, not the club; therein lies the problem. Reading between the lines, it's obvious why this deal is still in "our best interests" because the exit clause will cost us money.

One last thought for all you "glass half-empty" people: we had extra shops at Central Station and in Birkenhead before this and both closed down due to lack of sales. Demand? What demand??? – prove it, because I don't see people queueing up at our current shops so where are all these customers wanting the EFC merchandise?

Yes, we want to promote our club but it's not as easy and some of you want to make it sound. Mistakes have been made that but that doesn't mean what we have is as bad as some of you are making out.

Everybody on the board is just happy to plod aong doing the same every year; if Ferguson hadn’t retired, Kenwright would still be giving out 3-year contracts to Moyes.

In fact, what is the point of Elstone because, as long as he is here, we will always be with Chang and Kitbag and nothing will change as he is only looking to extend the current deals.

Nobody at the club is bothered to give any process time – even Bill’s recruitment of management was lazy: Moyes recommended by outgoing manager, Walter Smith; Martinez recommended by his buddy, Dave Whelan.

There is no evidence to show EFC went out and searched for a top manager befitting a top-six club with ambition – the same way there is obviously no effort whatsoever in improving our commercial income, which has been identified for years by fans as being totally incompetent.

Bill’s famous comment "Only Newcastle supporters buy shirts" shows his contempt for supporters wanting to wear the club's colours.

Elstone once stated we had something like 35 million Evertonians worldwide. So do something about the branding and marketing to them – no matter how many there are.

One question: If it’s such a shitty market where everyone is struggling to turn a profit, why have Kitbag decided to give the club £3m per season? Not for one year, or even three – a 10-year deal!!

Kitbag are obviously making money (the break clause would have been in the contract for both parties) and that’s on top of a massive own goal with a horrible badge, along with thousands of blues who can’t even manage to purchase the goods in the first place.

There have been hundreds on here saying they can’t get hold of Everton merchandise. Don’t fall for it.

Regarding the marketing, EFC stuff should be available in sports stores, JD etc. Not everybody likes buying clothing online.

I read a few years ago that we had sold a million "units" (jerseys) of one style, I can't remember which, but I am sure this adds up to more than £3 million a year.

Done up yet again... like a kipper.

The Chang deal looks fairly mid- to low-range, could be more but it benchmarks with other clubs of a similar marketing profile.

The deal with Umbro just signed is worth £30m over 5 years. Again, mid-range but significantly better than previous deals.

The Kitbag deal I have no problem with and here is why: Retailing is a risky business (and I speak as a retail director of 15 years standing – although I don’t wear a suit, Eugene, I prefer the more casual look).

It would be nonsense to suggest if you got everything right from a retailing perspective you could not make more money; however, you need to ensure you have the right competencies in such areas as sourcing, supply chain, marketing, inventory management etc etc etc. And that is not a cheap or easy thing to do.

It is very easy to get it spectacularly wrong and suddenly lose money, which in effect was what was happening. So I don’t think it’s unreasonable to outsource that area of operation and take the significant risk away. A bird in the hand and all.

Don’t forget, it was reported that Everton had the chance to end the Kitbag deal last year at Kitbag’s offer, and turned it down. Kitbag as a company have been losing money for a while now, replica shirt sales are in decline believe it or not. This suggests to me that Kitbag are losing money on the deal.

If it was such a bad deal, would they have made the offer and would we have turned the chance down? Well, yes you will say, if you buy the incompetence argument. As ever, not knowing the finer details, it’s easy to imagine generating commercial revenues is as simple as banging your fist on the table and demanding more. In reality, these things are market driven and there are only margins to negotiate around.

I appreciate that Kitbag equals incompetence in these parts and my viewpoint will be the proverbial fart in a spacesuit... but hey ho.

I don’t believe anybody is saying that anything relating to the commercial side of the club is easy or straightforward but it does seem that the people who make the decisions at the club do take the easy option and snatch the first deal that is presented to them that guarantees a sum of money.

Kids don’t tend to go online to buy stuff, they tend to walk around shopping centres and use pester power to persuade their parents to buy stuff for them. If the parent can get out of the shopping centre without buying anything, they are unlikely to go online to buy it at a later time.

Even if they do go online, how many people on this site alone have complained about lack of stock or shortage of certain sizes etc? The demand is there: to what degree, I wouldn’t know... but if one sale is lost due to poor stock control by the suppliers, that is hardly good for the club is it?

Not many potential customers are going to think, "Well, those Kitbag people are rubbish," – they are going to say "Everton FC are rubbish and they don’t care about the supporters." It’s almost as if Kitbag have done Everton FC a huge favour that no other company would consider; however, the fact that a new kit is on offer almost every year proves there must be some demand for the goods for sale.

We may not be the size of Man Utd or Barcelona but it wouldn’t hurt to promote the club wherever possible and as others have said if the club's commercial department behaved in a similar way to the Everton in the Community programme, we may bring a little more money into the club. New ground? not in this millennium with this current 'safe option' crew in charge.

Everton FC have shrunk considerably in the last decade and a half both on and off the pitch and it would seem we are going to continue to shrink off the pitch at least for the next five years, I’m not happy with that and I blame the major shareholders and commercial department for that, their hearts may be in the right place but their sense of all things Everton FC is not the same as many Evertonians. I wonder what state the club would be in if the fans had not stuck by the club in the last decade?

As far as Chang goes, we are 11 years into our partnership with them, with another 3 to run. I look at other clubs and wonder why they haven’t stuck with shirt sponsors for this length of time?

On your two posts, I am like all of us garnering information that I have read, dangerous sometimes because –believe it or not – everything on the Internet is not always true.However, my understanding is that we have signed a 5-year £30m deal with Umbro.

The question about Nike is a very good one as I can’t find anything to suggest we got a dime on that deal when we moved from Le Coq Sportif. The suspicion could be of course it was some way tied up at the time with our Kitbag deal, but as ever we don’t know.

As for Kitbag, they are losing money at a company level, that much is a matter of public record. Of course they deal with other clubs and have interests outside of football.

The reason I suspect the Everton deal is costing them money it is reported last year Everton had the option to exit the deal. I can only surmise it was at their request as we turned it down.

I only joined the debate as I am a retailer by trade and although some may believe it’s just a cash cow that requires little effort it is darned more difficult and complicated than that.

Here’s the Umbro link

http://www.tsmplug.com/football/kits/Everton-umbro-shirt-deal/

Where I have a little confusion is over your figure of £6M a season from our latest Kit Supplier. Unlike Chang, £4M, and Kitbag, £3M, deals that were announced by Everton singing from the roof tops, the kit supply deals where and still are shrouded in mystery. Le Coq Sportif was stated as £600k a season, Nike was undisclosed, accompanied by an explanation that it was hoped that whilst there was no upfront money it was hoped that marketing opportunities would be enhanced through the association... and then Umbro which again remains undisclosed save that it’s a technical partnership.

Since 2009, the line in the accounts, "Sponsorship, Merchandising & Advertising" has proven that the two former suppliers have paid little or nothing to Everton, indeed, the 2014 contribution from this line was £8.4M, broken down £4M from Chang, £3M from Kitbag leaving £1.4M for advertising and any payment from a kit supplier. Robert Elstone in his latest blog continues to be unwilling to be any more specific than stating Umbro pay a "significant sum".

The 2015 accounts haven’t been published yet but this line in the accounts will increase as I understand Chang have enhanced their deal to £5.3M a season. Just wondering where you got this figure of £6M, is it insider information from your industry?

Just about to post this and I have spotted your link. As you can see from the accounts figures I’ve provided above, the writer of this information has misinterpreted the Nike deal, this is of course the deal we have with Kitbag, I wonder how much credence we can now give the £6M a season revelation?

Well you may say it’s a safe assumption it’s tosh. I don’t know quite frankly as the club have not confirmed it one way or the other. I shared with you the only article I could find. As I said, quoting the Internet is a risky business.

It sort of feels about the size of deals that are currently being done, the accounts won’t tell us, as all revenues are agglomerated into one figure.

I think a valid criticism of this Board is that they are not transparent enough about their dealings. You can look at this two ways, they are charlatans who are bleeding the club dry; or they got their fingers so badly burned with the Kirkby fiasco they are just hugely cautious about how they put stuff in the public domain.

You pay your money you make your choice.

From that website: About the AuthorSameer Arshad
Formula One fan, blogger, designer and entrepreneur. Knows thing or two about a thing a two of sports, tweak codes, make cool infographs.

Fair do’s as I have repeatedly said we don’t really know.

I still don’t think the Kitbag deal is as bad as most people portray – which was my main point.

There is also a Daily Mail article that insinuates that we have signed an improved deal. However if I ever encouraged anyone to visit that site, my dad would turn in his grave – and he’s still alive!

My final post only because I’m in Singapore and it's fucking late.

We don’t know what we got from Nike, in the same way we don’t know what Umbro are paying, you are right my quoted source is in I no way reliable.

The Board should be more transparent about commercial matters, but that doesn’t stop me thinking, from what I know about the Kitbag deal,it’s not the omnishambles most think it is.

And I know you don’t agree!

Now - I don’t think he envisaged any Everonians being in the audience, because the shite he was coming out with was beyond compare.

He spent a few minutes talking about how he didn’t really like football and was ’a rugby man from Yorkshire’, and really fell into football by accident - but was ’a good accountant’, so was qualified to run a club like Everton.

He also bigged up the fact that Everton ’no longer need the bank manager’ as there is so much money in the PL now, and that the last day of the transfer window is ’a blast’

If I would’ve been drinking I probably would’ve been arrested.....

Firstly, there is no real comparison with other clubs or talk of whether other clubs have the same arrangement with a supplier. We get £3M a year for letting them sell and produce our kit, as opposed to that we also give up any strategic control about how to go about this. This may or may not be a good deal financially (ignoring the lost commercial and/or brand growth opportunities) but we can’t take a reasoned look at this without any comparison.

Secondly, it seems the amount we get from Umbro is very poor in comparison – I took away from the article that we get at most £1.4M for this. Liverpool get £27M and Aston Villa get £4M. Could this poor return be partially influenced by the Kitbag deal? Do they have any control/influence over which commercial partner we choose and is that costing us money. This area definitely needs to be explored in more detail.

Lastly, the Chang deal looks a very poor bit of business. £4M a year for shirt sponsorship – Villa are getting £9.4M, again miles ahead of us.

On paper, of the 3 deals I mention, the Kitbag deal seems the best from a monetary perspective; however, I have a sneaky suspicion that it is because of Kitbag in some way that we are so far behind in the other areas.

Graham, I have to agree with your comments as I too am very close to the retail sector and spend most of my day living it but more connected to running the supply chain side of things. I was at a recent closed supplier meeting with the CEO of Debenham’s and he confirmed that 19% of their on line sales were done via the mobile by customers in the shop itself, in his words complete madness buts that’s the way retail is heading.

Everton’s brand internationally is very weak, and I’m not on here to support the deal with Kitbag but running such operations yourself would mean employing a lot of agents and B&M teams on your wage bill and Everton just doesn’t have those skill sets in-house.

What nobody seems to air is actually how may items we sell as this would make better reading to what can and can’t be done. I’m not a fan of three new kits every year, especially with this year’s being very similar to the previous year so not much incentive for the customers to change... Plus changing every year will mean less SKU’s available to the markets place which means no re-runs on fast selling items so the chance of getting the stock out globally and spreading it is even more less likely.

They probably buy in two major hits, starting July/August and a replenishment in November, and no further production thereafter until the new kits come out the next July/August. The whole process is based around bulk ordering and if it sells out then so be it. This is fine for Zara as they refresh every six weeks their styles but not for brand Everton if it wants to go global.

Good luck in Singapore, Graham, it’s a great place. Orchard Road has some interesting bars and Clark Quay is always nice. Everton fans will have a ball there but be careful – the beer is very, very expensive: I paid £15 for a pint of Guinness in March and lager was around £8/10 per pint, so be prepared, if you go over for the pre-season friendly.