Capelli Sport: Amateur football is our bread-and-butter business

The summer of football begins next week with the opening match of the men's World Cup, held in the US, Canada, and Mexico. US sportswear brand Capelli Sport will also be participating, equipping the national team of Cape Verde and distributing licensed products from the Fédération Internationale de Football Association (FIFA).

In Europe, the team sport specialist is primarily known for its partnerships with clubs such as VfL Osnabrück, Grasshopper Club Zürich, and Sheffield FC. Capelli Sport has been based for over ten years with its European headquarters in Ratingen, North Rhine-Westphalia, near Düsseldorf, in a major football hub.

In this interview, Mourheg discusses the company's expectations for the tournament, current business performance, and the markets Capelli Sport plans to expand into.

World Cup is approaching. What are your expectations for the tournament?

The tournament is particularly interesting for us for several reasons, especially because it is taking place on our doorstep. Our parent company is based in the US, with headquarters in New York City and New Jersey, and our distribution centre is just five minutes from the MetLife Stadium, where the final will be held.

This is an extremely important event for the market there. We are already the market leader in US amateur football; everything below Major League Soccer (MLS) is our core business. When a mega-event comes to the country, it boosts the entire sport. For us as the market leader, this means a noticeable push in revenue, player numbers, and membership growth, and new football clubs are formed. That is why we definitely want to be involved, with at least one nation on the pitch.

Do you have a rough idea of the revenue boost the tournament will bring?

It depends on how many of our existing clubs benefit and how many new clubs approach us. Historically, the entire market's focus shifts heavily towards football during such periods.

The host nation's performance also plays a role; if they are eliminated in the group stage, the effect quickly dissipates. In the US, one mega-event follows another seamlessly. It would therefore be beneficial for the sport if the US team progresses as far as possible. We anticipate a short-term increase of up to 10 percent in US youth football. Furthermore, World Cup years are generally growth years for sports brands. Since we serve the team sports market directly, bypassing retail, we feel such developments immediately within the current year.

How has the first half of the year been for you, both globally and in Europe?

Good. The Cape Verde partnership alone, announced this half-year, has automatically generated a lot of interest. Considering how few brands besides the three major players are represented at a World Cup, it is really just a handful. This helps us enormously, including in direct conversations with clubs. We also had other strong areas: lacrosse and field hockey, with the latter becoming increasingly active with the upcoming European Championship. Overall, it has been an eventful first half.

Can you comment on revenue development?

Not yet definitively. It is a very seasonal business, and a lot still happens over the course of the year. We are not a brand that waits for pre-order rounds. Since we serve the team sports market directly, our revenue developments are more immediate. When the season starts, we see what the year has brought. Other brands have long since closed their order books and can do little to change things for this year. Our cycle is different; there is still a lot of movement.

Besides the sportswear segment, you are also responsible for Capelli New York. Do you notice differences between the two areas given the current consumer sentiment?

Yes, definitely. The sports industry is developing differently from fashion. In the fashion and accessories sector, we are heavily dependent on general consumer sentiment and even the weather. If people shop less, it is immediately reflected. In team sports, however, the business is more stable. As long as the ball is rolling, there is momentum, relatively independent of the weather. There are more relevant cycles about the World Cup schedule, mega-events, or the sporting success of a national team.

How large is Capelli Sport in relation to the fashion division?

The sports brand is clearly the group's major growth sector. The fashion accessories business, primarily under Capelli New York, has existed since the company was founded 36 years ago. We are the market leader there, generating around 300 million in revenue. The growth potential in this segment is largely exhausted.

In sports, however, we have enormous growth rates. The brand has been around for 12 years, and we are now the market leader in US youth and amateur football, generating around 85 million in revenue worldwide. This is more than some long-established brands in Germany have achieved after over 100 years. Therefore, the balance between the two divisions at the group level is shifting rapidly. The focus is clearly on the sports brand.

How does this differ in Europe?

In Europe, the ratio is more balanced; we have been active here with the fashion division for 26 years. The revenue split between sports and fashion is approximately 50-50.

How are the sales channels structured?

In the fashion sector, it is a classic wholesale business. More importantly, we market our brand on our own self-managed spaces in large department stores without our own staff but with our own brand presence. We are present in stores like Galeria and P&C, among others. This is complemented by white-label production for large retailers and private label listings.

In the sports segment, direct sales is the core business. Our own sales team sells directly to clubs, building personal relationships. Wholesale plays a subordinate role there and is limited to merchandise products, such as fan jerseys like those for Cape Verde. We also work with sports generalists like Engelhorn, as well as with equipment, accessories, and balls, with the exception of club kits, which are not sold through retail.

Your football partnerships range from professional level to amateur sport, which are also present with integrated fan shops on your website. Where do you draw the line between sponsorship and customer?

It is not always about sponsorship. Many clubs cooperate with us because we provide services for them, such as creating a club collection or setting up a team shop in our online store. These are collaborations without a sponsorship character. A sponsorship begins at a certain level, and league affiliation is not the decisive criterion for us.

We do not see being present with our logo on television broadcasts as a primary goal. It is more important for us to build brand awareness in the region through an engagement with a professional club and then more easily enter into discussions with amateur clubs in the area. The bread-and-butter business is amateur football. The merchandise business with clubs like Alemannia Aachen or VfL Osnabrück, which have a large fanbase, is an added bonus.

There are no standalone Capelli Sport stores, correct?

Correct, we currently have no standalone stores. There were once pop-ups in New York on Fifth Avenue, but no permanent locations.

Do you rely solely on showrooms for these partnerships, and do all the clubs come to you in Ratingen?

Ratingen is the headquarters with a showroom and distribution centre, where we welcome many clubs. We also have many people on the ground in various regions, whether in Bavaria or the north, as well as abroad. In addition, there are separate showrooms in places like Manchester, London, Greece, and other markets. Sometimes, we also have partnerships with clubs where we use a local space for meetings, sample presentations, or as a base for our field sales team.

You are active in more than 20 markets in Europe. Which are the key markets?

Strategically, in the long term, it is of course the 'Big Five' – the markets where we must have a presence: England, Germany, Spain, Italy, and France. We have had a very strong presence in England with our own offices from the beginning, and Germany is our largest market and will remain so in ten years' time. Besides these two markets, we are also currently well-positioned in other markets.

Which countries are those?

We are really pushing ahead in Poland and have good clubs and partnerships there, currently with two teams in the top league. Denmark is a very strong market, which has grown partly because we are represented with our own club in the second division. The Capelli Sport stadium is about a quarter of an hour from Copenhagen, where we host many activities. That has grown very quickly and organically.

We are also very strong in the Balkans, with the Serbian national team and our own local team, among others. In Greece, we have an office and started very early with AEK Athens, back when they were in the Champions League.

Is a major club or a national team the door-opener for you in a market?

That is the classic approach. You start with a major club and build a structure around it to then be able to penetrate deeper into the individual markets.

We do not do everything at once. In some markets, we currently only have one major club and are putting deeper development on the back burner for now. It is also a relationship-driven business; often, a new market has emerged that was not even on the roadmap because a strong partnership presented itself. The great thing about Europe is that this works relatively smoothly, without trade barriers or currency differences. Whether we win a club in Bavaria or the Netherlands, the distance to the neighbouring country is even shorter.

You just mentioned the 'Big Five'. Are the other markets besides Germany and England more difficult to enter?

Yes, Italy is a classic example of this. We do not have a single partner there yet. The football market there is romantic and visibly very appealing; it clearly belongs to the 'Big Five' and must be addressed at some point. It is, however, a more complex market than others. As long as we still have enough growth potential in other markets, we prefer to take the easier path because it leads to success more quickly.

Finally, what are the next goals for the brand?

We want to expand our reach even further, especially in amateur football. In markets where we have so far only been active through professional engagements, we want to penetrate deeper: Denmark, Poland, Switzerland, and of course, Germany. In Germany, sales remain the clear number one priority; we are tapping into more and more regions and continuing to expand the sales team.

In the professional sector, the hope is always that existing clubs will continue to develop. A good example is VfL Osnabrück. We already had them under contract in the 2. Bundesliga, then unfortunately, they were relegated shortly after, and now they are back. That is the ideal scenario! You do not have to convince a new second-division club; instead, you write great stories together with the club. At the same time, we are in talks with all realistic professional clubs from league one to league four that become available, and new engagements will follow in the near future.

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