When Lionel Messi left Barcelona for Paris Saint-Germain in 2021, it was because the LaLiga team couldn’t afford to keep him under Spanish soccer’s strict financial rules. On March 30, when Messi left micro-cap fashion house MGO Global for the much larger Centric Brands, it was for much the same reason: The cold reality of corporate accounting meant MGO couldn’t afford to keep its star in house.
One of the world’s most popular athletes, Messi inked a licensing deal in 2018 with an upstart fashion firm founded by Maximiliano Ojeda, an Argentine businessman turned New York real estate agent, and Ginny Hilfiger, the former head of creative for the Fila brand and creative executive at her brother Tommy’s company.
Through connections that Ojeda made selling condos and co-ops in New York last decade, he met his fellow Argentine Messi and convinced him to let Hilfiger design a line of outerwear and casual apparel and sell it through MGO Global, the business they started with Messi as their foundational brand. Their goal: create “a performance-driven lifestyle brand portfolio company focused on strategically leveraging the fame, celebrity power and global social media influence of world class athletes, entertainers and other cultural icons,” MGO said in its 2023 initial public offering prospectus.
Related Articles
Fashion Scoops
Silas Capital Closes $150 Million in Fund for Start-ups
Footwear
Following Record December Profits, Kurt Geiger Says Handbags Are Driving U.S. Growth
Striking a deal with one of the world’s most popular athletes seemed to be a coup for an upstart company in the hotly competitive world of fashion. And the timing for going public appeared ideal: Four weeks after Messi led Argentina to the 2022 World Cup, MGO raised $8.63 million in its IPO.
“Demonstrating just how impactful the Messi name is on the fashion industry, when 150,000 Messi soccer shirts went on sale on Paris Saint-Germain’s website on the day his transfer from Barcelona to France was announced, the shirts sold out in just seven minutes, according to sportbible.com,” MGO told investors in its prospectus.
But that points out one problem with the Messi Brand: MGO didn’t have rights to anything sports related, including jerseys, cleats and anything displaying Messi’s signature. It did have rights to, among other things, reproduce his tattoos on hoodies, to craft limited-edition “bold” and “arty” graphic T-shirts and to recreate “Messi’s preferred casual dress shirt,” a plaid flannel shirt with two breast pockets.
While the design aesthetic and the quality of the garments has never been an issue for MGO Global, selling Messi-branded coats never generated the level of consumer fervor as the PSG jerseys.
The depth of the problem came out this past week, when MGO filed its annual report with the Securities and Exchange Commission. In 2023, Messi Brand sales totaled $1.69 million. That brought the total of Messi Brand clothes MGO sold over the three publicly disclosed years to $3.6 million. Still, there were signs the brand was taking off: In the fourth quarter of 2023, Messi Brand sold about $760,000, easily its best quarter ever. Revenue was possibly goosed by the soccer star doing a rare social media plug of the brand, posting two one-year anniversary sale posts to his 500 million followers in December.
But it was too little, too late. In three years through 2023, MGO had paid Messi a little more than $2 million in licensing fees, spent about $1.8 million making and selling the clothes and tallied corporate-wide losses of $11.4 million. With a $1.6 million royalty payment due to the Inter Miami star in November, another $1.3 million in corporate liabilities and less than $1 million in cash on its books, it appeared obvious MGO couldn’t afford to keep its star.
Just as lower-division soccer teams sell their best players to top-of-the-table heavyweights to fund their operations, MGO decided to do the same. Last week it sold its star Messi Brand for $2 million cash and the assumption of the upcoming royalty payment. A spokesperson for MGO didn’t respond to a request for comment.
The buyer: the much larger Centric Brands, a licensing powerhouse that produces some 150 brands, including Zac Posen jeans for women, Avirex coats for men and, in a coincidence that must sting a little, Tommy Hilfiger clothes for kids. Centric will have more leverage and deeper pockets to push the Messi brand. It also presumably becomes the favorite to sign Messi to a new licensing agreement, since the deal originated by MGO expires in December. A Centric Brands spokesperson didn’t respond to a request for comment.
What’s left for MGO? A little more than a year ago it bought the rights to Stand Flagpoles, a line of telescoping poles for homes and vehicles that focuses on right-wing consumers with blog posts like “Top 5 Conservatives to Follow on Twitter” and pitches for flags “that exemplify your American spirit and conservative viewpoints.”
The flagpole business is a good one. In the nine months MGO owned Stand, the brand generated $3.7 million in revenue — morethan Messi Brand sold in three years. MGO stock rallied 18 percent in the two days after news of the Centric sale, which closed March 30 under terms of the deal.
But that doesn’t mean the parting has been easy. MGO shares have plunged 36 percent from their brief deal peak. And as of Thursday, MGO’s website still featured multiple photos of Messi, looking hopeful and determined in Hilfiger’s various stylish garments.
Editor’s Note: This article first appeared on Sportico, which, like WWD, is also owned by PMC.
