Sony Music’s merchandising division, The Thread Shop, has inked a deal to acquire the music merch division of The Araca Group for an undisclosed fee.
New York-based The Araca Group was founded in 1997 by partners Matthew Rego, Michael Rego, and Hank Unger. Its music merchandising roster, which now migrates to Sony, includes artists such as Led Zeppelin, P!NK (pictured), Shania Twain, Sugarland and Zayn.
Sony’s move comes six months after rival Universal Music Group swooped for Los Angeles-based merch maker Epic Rights – a deal which itself arrived three months after Warner acquired German merch and e-commerce company EMP for $180m.
Consolidation is rife in the global artist merch space, it seems – and the major labels are splashing the cash to secure their positions.
Discussing the Araca Group deal, Richard Story, President, Commercial Music Group, Sony Music Entertainment, said: “As artists continue to seek out merchandising opportunities to complement their music revenues, branding, and marketing, Sony Music is significantly expanding its presence in this growing area of the business under the leadership of Howard Lau.
“The acquisition of The Araca Group’s music merchandise division will further strengthen The Thread Shop’s artist roster and infrastructure and the competitive capabilities we offer to the music community.”
Michael Rego, CEO of The Araca Group added, “We are thrilled at the opportunity this acquisition provides for our music merchandise division. The team at The Thread Shop is artist-focused, passionate and well positioned to build upon the merchandising programs that Araca has created for our music clients.”
In connection with the acquisition, several members of The Araca Group’s music merchandising team will join The Thread Shop to continue active relationships and develop new opportunities for the integrated roster.
Sony said in a press release that the purchase “significantly expands” the reach of its in-house merchandising business and “further enhances the suite of services and solutions that it offers to the artist community”.
Outside of its music merch division (now owned by Sony), The Araca group is a Tony Award-winning theatrical production company, as well as a leading Broadway, TV and film merchandising company.
Universal Music Group is the only major music co to break out the performance of merchandise in its financials.
In H1 2019, UMG’s merchandise operation nearly doubled in size. Its half-year revenues in the category grew from €107m ($130m) in H1 2018 to €202m ($228m) in the equivalent period of this year.Music Business Worldwide