Lionel Messi to pocket over $1.5 million amid failed clothing line venture

Lionel Messi will be paid nearly $2 million amid sales struggles with his branded-clothing line | Credits: IMAGO, Instagram (TheMessiStore)

Lionel Messi to pocket over $1.5 million amid failed clothing line venture

David Ben 15:56 - 27.03.2024

MGO have sold its license having failed to generate enough money in sales to match what they are paying Messi.

Days after a reported spike in his net worth, Lionel Messi is set to receive over $1.5 million (€1.6 million) following the failed venture of his casual clothing brand.

Sportico reports that Centric Brands, a clothing manufacturer owned by private equity giant Blackstone, is taking over the license from MGO Global, a publicly traded business co-founded by fashion veteran Ginny Hilfiger.

Despite initial enthusiasm about the project, Messi's foray into the world of fashion has now ended in disappointment for MGO Global.

Lionel Messi clothing line
Lionel Messi | Credit: IMAGO

What Happened? The Financial dynamics behind the transfer EXPLAINED

Lionel Messi clothing line
Credit: Instagram/The Messi Store

As reported by Sportico, the transaction between MGO Global and Centric Brands involves a $2 million cash payment to MGO Global, alongside a €1.5 million ($1.6 million) royalty payment to Lionel Messi, as outlined in the term sheet filed with the Securities & Exchange Commission.

This move marks the end of a challenging period for MGO Global, which struggled to generate sufficient revenue from Messi-branded merchandise to offset the costs of the licensing agreement.

Despite MGO Global's efforts to leverage Messi's popularity and expand its portfolio with eight-time Ballon d’Or winner and celebrity fashion brands, the company faced obstacles in matching its sales with the financial commitments to the Inter Miami skipper.

The third quarter of 2023, the last reported quarter for MGO Global, saw sales of Messi brand apparel amounting to $415,641, falling short of expectations. Under the terms of the licensing agreement, Messi receives a minimum royalty every five months, in addition to a percentage of sales over a specified threshold.

What next for the Messi Clothing Brand?

Lionel Messi clothing brand
MGO Global launched the Messi clothing brand in 2018 | Credit: Getty

With Centric Brands assuming control of the Messi license, the focus now shifts towards revitalizing the brand under a new management structure.

Centric Brands, backed by Blackstone and other private equity firms, offers a larger and more diversified platform for the Messi brand to thrive.

Lionel Messi clothing line
Credit: Instagram/The Messi Store
Lionel Messi clothing line
Despite the license sale, Messi will still retain ownership of the clothing line | Credit: Instagram/The Messi Store

The company's robust financial position, with over $2.6 billion in annual revenue as of its last disclosed results in 2019, makes it a capable steward for Messi's clothing line venture.

As part of the transition, MGO Global will transfer operation of the entire Messi online store, customer lists, design templates, and technical knowledge to Centric Brands.

However, despite the challenges faced by MGO Global, Messi, one of the world’s richest footballers, retains ownership rights to his brand as he is not a shareholder in MGO.

The 36-year-old legendary playmaker has equally agreed to the transfer, as per the regulatory filing.

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