Hillhouse launches China sports retail JV with US-based Fanatics
Hillhouse Capital has established a China joint venture with Fanatics, a US-based sports retailer that specializes in licensed sports apparel.
Michael Rubin, executive chairman of Fanatics, shared a CNBC report via Twitter that suggested the joint venture could be worth $1 billion.
Fanatics, which was established in 1995 and bought by Rubin in 2011, reportedly secured $350 million in funding last year at a valuation of $6.2 billion. SoftBank and Alibaba Group have both participated in earlier rounds.
The company is an official e-commerce partner of all five major US sports leagues and operates online stores for more than 300 collegiate and professional sports teams. It has also expanded into the UK, Spain, Japan, Germany, Thailand, Australia, and India. Sales totaled approximately $2.5 billion in 2019.
Fanatics China will be based in Shanghai. It will utilize Hillhouse's local market knowledge and e-commerce expertise to build e-commerce sites for sports leagues and teams, open retail outlets, and develop products for the China market.
Hillhouse has existing exposure to sports retail in China through Belle International, a footwear retailer it privatized in 2017. The company's sports unit was spun out as Topsports through a Hong Kong IPO in 2019. It claims to be the largest sportswear retailer in China with a 15.9% market share. Approximately 90% of its sales revenue comes from Nike and Adidas products
Hillhouse is currently seeking $12 billion for separate buyout and growth funds, having previously raised single pools of capital for private equity. A target of $9.5 billion has been set for the buyout fund and $2.5 billion for the growth vehicle. In addition, the firm is said to be raising a $1 billion venture capital fund.
Hillhouse launched a separate VC arm under the name GL Ventures last year. GL Ventures operates independently of its parent, with a team drawn from Hillhouse's original VC investment operation.
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