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How Do You Sell Concert Tees Without Concerts? Merch Companies Are Up Against a Wall

“I was thinking this is a bulletproof business,” says one of many merch execs who have lost their biggest revenue stream

Festival attendees wait in line for merchandise at 2017's Glastonbury Festival.


For years, Chris Cornell — the CEO of Manhead Merch, which handles T-shirts, posters, and other music merch for artists, including Fall Out Boy, Panic! at the Disco, and Alanis Morissette — considered his industry to be recession-proof. But when COVID-19 struck and shuttered concerts, Cornell  found his company abruptly stripped 70 percent of its usual revenue stream. “Even when the economy’s in the shitter, people still go to concerts and they still buy merchandise,” he says. “I was thinking this is a bulletproof business. But this has smacked everyone in the head.”

This show season Manhead Merch was supposed to have its busiest tour period in years. Like its peers, Manhead is now facing significant pressure as its touring clients have had to push back their shows — some to 2021 and beyond. Because tours are many music merchandisers’ biggest revenue stream, the loss of live shows is putting them up against a wall. Since physical retail stores are also closed, online outlets are all that’s left. “Retail’s completely dried up with touring,” Cornell says. “We’ve seen a 30 percent increase in our baseline e-commerce sales, and that’s without promotions or doing anything unusual. We received our PPP funding, so we’re hopefully OK for the year and won’t have to do layoffs. The incremental gains in e-commerce have been good, but it’s definitely not going to save 2020. The loss of touring is devastating.”

While Manhead is not in poor financial shape — “We’ve saved up for a rainy day,” says Cornell — the uncertainty around when concerts will actually come back is stressing out all merchandisers. In the past several decades, as touring has become an integral part of performing artists’ revenue, the ancillary merchandise business flourished. According to a report last year from Licensing International, a trade group that tracks sales data on licensed merchandise, music merch was a $3.5 billion industry in 2018, up from just more than $3 billion two years before. But like the live-music industry, those numbers will likely contract for 2020.

There had been interruption in the supply chain as well, Cornell says, as printers were shut down and distributors’ warehouses were unable to ship products — but as the pandemic has continued, the disruption has been more manageable. Had the crisis broken when most of Manhead’s clients were touring, the company would have been stuck with merchandise, or bands would have owed Manhead money. Luckily, most of their artists’ tours hadn’t started yet, and the company avoided that challenge, Cornell says.

Challenges haven’t been localized to just artist-tour merchandisers. The Bright Pursuit, a festival merchandiser, mainly handles sales at events including Governors Ball and Rolling Loud. Every day through March and early April, Bright Pursuit was getting more cancellation and postponement notices, with around 16 cancellations so far, says Evan Blaire, Bright Pursuit’s owner and creative director. Bright Pursuit still has 22 festivals slated for the year, including dates that have been pushed to the fall, although it’s still unclear if those will happen either.

With scant other options, Manhead and Bright Pursuit are focusing efforts on e-commerce. Bright Pursuit partnered up for a merchandise drop on Torey Lanez’s latest album, and the company is planning more drops with influencers, expected in the coming months.

“We’re taking a bit of a bath on tours we had on the road that got canceled, with bands stiffing us on merch bills, since they can’t pay for them. My month has been trying to get us completely reliant on e-commerce. … Realistically, everything was going that way anyway.” — Billy Candler, CEO of California-based Absolute Merch

Another company, Absolute Merch in Orange County, California, has been shifting toward e-commerce for years. Founder and CEO Billy Candler says it’s a far more stable business than relying on touring. Before the pandemic, the company was already making 75 percent of its P&L through e-commerce. But with multiple clients on tour, the merchandise company still faced six-figure late payouts from veteran and upcoming artists alike who are struggling to pay their bills, creating a speed bump in the revenue stream. “We’re taking a bit of a bath on tours we had on the road that got canceled, with bands stiffing us on merch bills since they can’t pay for them,” Candler says.

Lucikly, Candler says, “April might be one of our biggest months on record now that clients are emphasizing moving stuff online.” He adds that he has spent the past month “trying to get us completely reliant on e-commerce, and if and when concerts come back, that’ll just be icing on the cake. Realistically, everything was going that [e-commerce] way anyway.”

Even freelance merchandisers have been hit hard. Dominic Varacallo, an independent merchandiser who lives in Wilmington, Delaware, says 75 percent of his revenue comes from tours. He usually spends stints on the road as merchandise manager for bands like Bayside, which was planning a 20th-anniversary tour, and Alkaline Trio, which was going to tour with Bad Religion; the two were supposed to earn him as much as $40,000, he says.

Varacallo was expecting a strong year — and he’d just bought a new house for his family. But with tour earnings on hold, the family now has to spend sparingly on essentials like bills, food, and heat. His only source of income right now is through online store Merchnow, and he has applied for unemployment as well as for a grant from Live Nation’s Crew Nation relief effort.

“If people aren’t comfortable leaving their house until there’s a vaccine, no one’s going to show up. And as a merchandise person, if no one’s there, then we’re really screwed.” — Dominic Varacallo, Delaware-based indie merchandiser

“It was on a Monday when the first band said ‘we’re going home,’ ” Varacallo says. “By Friday, every band I consulted with did the same. There’s a lot of uncertainty now, but in my opinion, it’s going to be the whole year at least. We’ve got savings, but it’s starting to feel like it’s not going to last us as long as it needs to. Even if they lift a ban of a gathering of people, people still won’t come. With bands rescheduling tours, we can say things will be OK in August, but if people aren’t comfortable leaving their house until there’s a vaccine, no one’s going to show up. And as a merchandise person, if no one’s there, then we’re really screwed.”

It’s unclear how long merch companies can sustain business without live shows. Derek Ball, CEO of atVenu — a technology company for point-of-sale and inventory tracking for major concert tours and festivals, including Coachella and Summerfest — works with several smaller merchandisers along with the merchandise wings for all of the big three record companies. The smaller the company, Ball says, the more likely the chance it would go under because of the pandemic.

Several merchandisers have already issued furloughs for some of their staff, and Bandmerch, which has handled merchandise for Alison Krauss, Steven Tyler, and the Misfits, has already furloughed a majority of its workforce until further notice, according to an auto-reply email from a company employee sent to Rolling Stone. Bandmerch did not respond to request for comment.

“The bigger ones at the labels, they have the staying power to ride this out, whatever it may be, but they’re going to survive,” Ball says. “With these smaller merchandising companies, as you’d expect, they don’t have the resources of being backed by one of the big three record labels. The smaller they are, the more nervous. Some of them are dependent on that one big festival they’ve been vending for 15 years. What happens when that doesn’t happen?”

Bravado is Universal Music Group’s merchandise wing and one of the largest artist merchandisers in the country. CEO Mat Vlasic declined to say how big a segment touring is in Bravado’s business compared to retail and e-commerce, but he says touring is an important part of Bravado’s revenue stream. Had the pandemic struck a month later, Bravado could have been sitting on considerably more merchandise, but like Manhead, it dodged that issue.

Bravado didn’t come away entirely unscathed though: Billie Eilish, for instance, had just started her world tour when the pandemic hit full force after the third date. The merchandise company is getting ready to announce more-creative initiatives on what it will do with its leftover merchandise.

With backing from the world’s largest music company, Bravado can cushion the blow from the touring stoppages far easier than smaller vendors, and it has avoided furloughs entirely so far, Vlasic says. Last week, the company announced a new charitable initiative called We’ve Got You Covered, in which the company is selling artist-branded masks and donating the proceeds to various music-based relief funds.

Bravado has been shifting toward more e-commerce-based revenue since Vlasic took over as CEO, he says, and the pandemic has accelerated that thinking. “We’ve shifted our thinking to: How do we excel there?” Vlasic says. “The good thing for us is we’ve been focusing on it for years, it kind of dovetailed nicely. For sure our business is going to be impacted. I’m just remaining quite positive that there’s opportunity.”

Howard Lau, senior vice president and head of Sony Music Entertainment’s merchandiser, the Thread Shop, has a similar perception. Thread Shop has shifted more heavily into e-commerce, using bundles, making new products, including some masks, and integrating products with live virtual shows. Within the past year, Thread Shop had gotten the merchandising rights for nontouring legacy artists like the Beatles, Jimi Hendrix and Led Zeppelin, which perform well through e-commerce. Thread Shop has seen a double-digit percentage increase in online sales.

Like Bravado, Thread Shop hasn’t issued furloughs or layoffs yet, and it is likely much more poised to navigate the pandemic environment than its considerably smaller competitors. While Lau says Thread Shop continues to strengthen its nontouring streams while it waits for the live business to return, he added that no music merchandising company can sustain itself in the long term without touring.

“It’s definitely not ideal for any music merchandising company to not have touring, but I think we’re very integrated with Sony Music and work closely with our labels,” Lau says. “When there’s new music offerings, we’re right there with them offering merch opportunities, merch bundles, that’s not just business, it’s a good strategic play for new music to have merchandise — but, eventually, the touring business has to come back for music merchandising companies to be sustainable.”