Lionel Messi’s casual clothing brand is being taken over by Centric Brands, a clothing maker owned by private equity giant Blackstone that also licenses clothing and accessory brands including Nautica, Kate Spade and Izod.
Centric is assuming the license from MGO Global, a publicly traded business co-founded by fashion veteran Ginny Hilfiger. MGO is selling the license to Centric for a $2 million cash payment; Centric will pay a €1.5 million ($1.6 million) royalty payment due to the soccer star, according to the term sheet of the transaction filed with the Securities & Exchange Commission Tuesday.
MGO Global and Centric Brands didn’t immediately respond to requests for comment.
The move culminates a disappointing run with the Messi license for MGO. MGO, which was founded in 2018, acquired the rights to create the Messi Brand of non-sports-related casual clothes, outwear and children’s accessories from the soccer star, and the business had designs to build off its rights to the Messi brand to create a series of athlete and celebrity fashion brands. MGO held its IPO a little over a year ago, capitalizing on Messi’s popularity after he led Argentina to the World Cup title at the end of 2022.
For all its reported quarters, however, MGO has been unable to sell enough Messi merchandise to match what it has been paying Messi. In the third quarter of 2023, the last reported quarter for MGO, it sold $415,641 worth of Messi brand apparel. Messi isn’t a shareholder in MGO; instead he receives a minimum royalty of €500,000 every five months (about $540,000) under a three-year license that expires in December, along with 12% of any sales over that, according to regulatory filings. Last year, MGO purchased a flagpole maker to diversify its business.
Centric is presumably a larger, more diverse home for the Messi brand. The company is majority-owned by Blackstone with minority owners fellow private equity firms Ares Management and HPS Investment Partners, according to an October 2020 press release announcing the company had emerged from bankruptcy. The business had more than $2.6 billion in annual revenue in its last disclosed annual results, from 2019, according to data compiled by S&P Global Insights.
According to the term sheet, MGO will hand over operation of the Messi online store, all customer lists, design templates and technical knowledge to Centric by Saturday. Messi, who owns the rights to his brand, agreed to the transfer, according to the regulatory filing.
MGO, which went public at a share price of $5 and briefly hit a high of $16.61 last year, was trading at about 38 cents Tuesday morning.