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Published: April 16, 2010
Americans love their sports. In fact, many
males love them to death. According to a study by Xavier
University of obituaries from 19 newspapers, 15% of men's
obituaries mentioned some form of sports fan identification.
Their closest loved ones knew how much the deceased's team meant
to them.
What do these men get as gifts for Christmas? For their
birthdays? Team-logoed clothing, home decor and other sports
collectibles.
One tiny $56 million company is positioning itself as the leader
in providing sports memorabilia and collectibles to fans by
partnering with giant online retailers such as Wal-Mart
(NYSE: WMT), J.C. Penny's (NYSE: JCP) and Amazon (Nasdaq:
AMZN).
Dreams Inc. (AMEX: DRJ) is a sports memorabilia company
based in Plantation, Florida. Through 18 brick and mortar shops,
along with catalogues, online shops, franchises and affiliates,
Dreams offers sports fans licensed team apparel, collectibles,
autographed memorabilia, custom display cases and high-end
framing.
The company operates two main e-commerce sites,
ProSportsMemorabilia.com and FansEdge.com. FansEdge is the
company's flagship online brand. In 2009, sales at this website
grew to $60,000, up from just $4,000 in 2004. But that's just
the beginning. Dreams also offers this platform as a turnkey
webshop to an impressive list of clients, including AOL Sports,
Majestic Athletic and the Philadelphia Eagles.
At the end of 2009, a total of 50 clients used the company's
syndication services. Dreams also has agreements with Amazon.com
and WalMart.com that allow the company to offer its FansEdge and
ProTeam brands at these well-trafficked websites. In total, the
company's e-commerce division recorded sales of $35 million in
the fourth quarter 2009, up from $24.3 million a year earlier.
Total revenues for the quarter ended December 31, 2009, were
up +22.3% to $43.3 million -- a record for the company --
compared with $35.4 million in the same quarter of 2008. In
fact, income from continuing operations before taxes came to
$5.6 million, up +250% from $1.6 million for the same quarter in
2008. Even better, the company was profitable last year, and in
the fourth quarter the company earned $3 million, up +165% from
the fourth quarter of 2008.
And growth like this could continue. In March, the company
announced that it had partnered with NBC Sports to manage
NBCSports.com's online store. According to a recent article
published by TrafficEstimate.com, NBCSports.com sees an
estimated 5.2 million monthly website visits and Alexa, an
internet traffic analyzer, estimates that the site NBCSports.com
is in the top 500 websites in terms of traffic in the United
States. In addition, Dreams has added more than 40 partner
companies in the past 12 months.
Dreams began its partnership with J.C, Penny's in October --
expanding Penny's sports offerings from 1,400 to more than
100,000 -- and full-year financial results have not yet come in.
According to Vista Partners, an independent equity research
firm, this partnership could produce more than $20 million in
revenue this year. Similarly, Walmart.com added Dream's products
in the second half of 2009.
The company had about $580,000 in cash and $22.6 million in debt
at the end of 2009.
Dreams is a very small company with great growth potential. It
is rapidly building an e-commerce partner network, growing its
revenue, and is already profitable.
-- Anthony Haddad
Staff Writer
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