It seems that licensing trademarks is a popular option for business purposes. This trend appears to be most evident in fashion, where there are more brand and product names licensed than ever. Licensing opportunities offer retailers a way to differentiate themselves from the competition.
The act of leasing legally protected properties (e.g. trademarked names, logos, characters, phrases or designs) to another party together with products, services, promotions, is called licensing. This process focuses on customer management and brand equity. It also provides the right atmosphere for shopping. Licenses are a method of growing your brand. Licensing provides benefits for brand recall that cannot be achieved if one presents a completely new image.
There are many types of licensing business like art & design, corporate brands, events, fashion brands, food & drink, institutional, magazine brands, music, personalities, sports and television licensing to name a few.
Licensing for licensors has many advantages
A licensor has the main benefit of having its trademark or property used and developed.
This is possible through licensing
It is important to. Improve brand presence in a distribution or retail outlet.
It is important to. Creating brand awareness to promote its core products and services.
It will provide and increase its core values by various links to the category or licensed product/service.
It is possible to. Introducing new markets, either geographical or consumer-based, that were not possible with the company’s strengths.
This is. Creating new revenue streams, sometimes with minimal involvement and without additional financial resources
Licensing for licensees is a benefit
A licensee, especially a manufacturer or retailer, has the advantage of being able to significantly increase consumer interest and sell its products or services.
This is possible through licensing
It is. It is important to shift the consumer’s values towards licensed products and services.
Provide added value and differentiation on the market.
It is possible to. Additional marketing support and speed of core property activity provided by the licensor.
This is. Attracting potential new markets that haven’t been paying attention to a licensede’s service or product.
This is. Facilitating the transition to new markets through product extension.
You can. Attain additional retail space.
Globally, licensing is a growing trend
The year-over-year global retail sales between 2000 and 2004 show an increase in licensing businesses. The 2004 expected worldwide retail sales for licensed businesses increased 1.5 percent to $175.3billion compared with 2003’s $172.7billion. This compares to the USA which made nearly $110 billion and Europe making $34 billion. In UK, the brand licensing industry is worth approximately £7billion in retail and £368million in royalties.
Recently many international textile-garment-apparel manufacturing companies are in news due to their licensing agreement with many other companies.
Everlast Worldwide Inc is a seller of men’s and woman’s accessories and apparel. Recently, the company signed a four-year licensing agreement with Jacques Moret Inc in New York City. The new deal grants Moret, an important supplier to the US apparel industry, the license to sell Everlast men’s activewear, swimwear, and sportswear. M. Hidary and Company Inc will be Moret’s partners in the design, development and sale of the activewear part of this license. M. Hidary’s extensive experience in men’s branded activewear has made it a great success. The men’s apparel stock will be purchased by Everlast. They also assume all other costs related to the transition. Additional sales and merchandising personnel from key companies will be joining the group.
Burnaby-based ID Wear from B.C. has been granted the exclusive license to manufacture, design, and sell the Playboy brand high-end jeans for North America. Pimlico manufactures denim for both its private brands (ID Wear) and public labels like Harley-Davidson and Nordstrom’s. ID Wear was the first North American company that offers laser branding on garments.
Marvel Enterprises, Inc., an international character-based entertainment licensing firm, has recently announced that it will be strengthening its apparel licensing business through key partners Kids Headquarters (as master attire licensee) as well as Mad Engine (which will lead t-shirts, tops, and other apparel). This new alliance with Kids Headquarters will be complemented by a stronger relationship with Mad Engine.
Juicy Couture has partnered with Sàfilo Group for a full eyewear collection that it will introduce in spring 2006. Through an agreement between Haggar Clothing Co.’s fashion division and The Feldman Corporation’s I-dealoptics, a set of affordable sunglasses and ophthalmic glasses for men will be also introduced.
Avirex, a sportswear brand that fuses military and aviation-inspired leather jackets and outerwear with sportswear brands Avirex and Kids Headquarters signed a multiyear licensing agreement for outerwear and sportswear for boys.
G-III Apparel Group, Outerwear and Sportswear Company, acquired Marvin Richards and Winlit Group Ltd., privately owned outerwear companies. G-III now has licenses to Calvin Klein and Guess for men and women, Tommy Hilfiger leather outerwear and London Fog.
The Top Five Children’s Apparel Character Licenses for 2004
1. Winnie the Pooh & Friends
2. Disney Princess
3. Spider-Man
4. Mickey Mouse & Friends
5. SpongeBob squarePants
Sesame Workshop and Pearl Izumi have teamed up to produce Sesame St. cycling socks. Champion, through a licensing agreement, has created Champion Plus, which is a complete line of activewear for women that includes performance and fitness. “ath-leisure”Styles Tunk Limited. (a CINQ Group Brand) and Warner Bros. Consumer Products have joined forces to create tops, jackets and other headwear.
India’s licensing practice is on the rise.
Many Indian textile companies have entered into licensing agreements, which has led to an increase in business via licensing.
Gokaldas Images Ltd owns Weekender and markets it. The agreement allows for the licensing of the WWE logos to be used in domestic marketing. A successful form of licensing – sports licensing, has developed into a multi¬billion dollar systematic business and has increased its scope to sporting events like WWE, the Olympics, EURO, Cricket and Soccer World Cups. Licensing accounts for about a fifth of WWE’s $ 300 Million per year profit. Weekender-Gokaldas Images Ltd. also markets Enamour lingerie.
In the last decade, entertainment and character licensing has also been a huge success. Each year, they make billions of dollars.
S. Kumars plans to bring six international brands into India and is interested in a long-term relationship with these textile companies.
Indus Clothing Ltd has signed a license agreement with Disney cConsumer Products to manufacture its children’s wear brand Disney cJeans. Indus Clothing Ltd can now open independent retail shops for its entire product range, which includes the Disney brand. Indus Clothing Ltd plans to invest approximately Rs. 21 crore for the establishment of 20 Disney Jeans shops by 2007 and 50 in 2008 respectively. The brand’s main goal is to build a robust retail network. They also plan to continue to create and sustain a consistent brand image. Indus Clothing Ltd licenses Lee Cooper apparel in India.
Madura Garments is the owner of the world licence for three brands: Allen Solly (Louis Philippe), Peter England (Peter England). With the goal of strengthening their brand portfolio in key segments such as women’s, luxury relaxed clothing segment and accessories, it has also entered into a strategic partnership with Esprit. UMM, an Italian brand synonymous with MTV has joined Pantaloon. It is one of India’s biggest retail chains.
American outerwear brand Jockey was introduced to India by Page Apparels, a Bangalore-based marketing agency. Apart from the distribution and production rights, India-based Page Apparels has also granted the brand a buyback agreement.
Mattel granted permission to The Shirt Co (TSC), which is authorized to sell Barbie clothing in India, the license for the Shirt and Clothing Company (TSC). For this it works closely with Smith & Brooks, the official licensee for Barbie clothing in the European market. Additionally, brands like Savile Row and Trussardi are licensed to the Forbes Gokak Group apparel division.
Tommy Hilfiger entered India through a joint venture with the Murjani Group, Arvind Mills. AMB is the Arvind Murjani Brands Private Limited and has the licensing agreement that allows Tommy Hilfiger’s apparel to be distributed in India. B K Murjani, a New York-based businessman, founded The Murjani Group. Murjani’s, which produced more than 10,000,000 units an year, was the most successful apparel producer in the United States by 1958.
In the 1970s Murjani began to market and develop brand names. Through the years the company has grown and brought in major brands such as Gloria Vanderbilt Clothes, Coca-Cola Clothes, and Tommy Hilfiger. French Connection UK is preparing to launch this brand in India. According to reports, the company is in negotiations for a license deal with Vijay Murjani Group.
Licenses are a popular option for many companies to enhance brand recognition, build brand equity and strengthen brand image. In return for a specified royalty or payment, licensing is a business arrangement where the trademark owner or proprietor of a product or trade mark allows another party to use the brand name.
Recent approval by the Indian government was given to Mothercare Plc (a UK-based chain of kids’ care retailers), for establishing a 100 percent subsidiary in India. The investment is Rs 32.25 Crore. Indian Division will purchase and find textiles and clothing from Indian traders. It would also promote them in India by franchising with other business associates.
Shopper’s Stop has been granted a licence by Mothercare to allow Shopper’s Stop the use of its trademark and brand name for the products that will be sold and distributed in India through its Indian subsidiary.
After the success in international markets, Indian companies have adopted the licensing model. Companies have been able to make big profits by licensing their products. Oxford Industries, Inc. shows how licensing can make a company more successful. This company is an international, multi-productive producer, wholesaler, and licensee of private and branded apparel for children, men, and women.
Oxford has a wide range of products and services for both retailers and consumers to meet individual needs. The major brands include Tommy Bahama and Indigo Palms as well as Island Soft and Ben Sherman. Ely and Walker and Oxford Golf are also among them. These brands can be found in major chains, specialty catalogs, mass merchants and department stores. It also holds exclusive rights to manufacture and sell product categories under the Nautica and Geoffrey Beene labels, Slates and Dockers, Oscar de la Renta, and Tommy Hilfiger.
The two major categories for fashion licensing are apparel brands and designer name. Fashion licensing has two main priorities: brand extension and licensing other products. Calvin Klein is a great example of this kind of agreement. Its income increased by three times after it adopted such a marketing strategy.
Licensing, responsible for over 90 percent of label sales in 1997, has increased the global brand’s retail value to $ 5.8 billion, from $ 2.1 million in 1994. The fact that many international companies cater to Indian licensing clients is an indication of the acceptance by business leaders and the potential for a new market. All spheres now have licensing possibilities. You and Me Baby and Warner Bros are some of the top international brands that can harness their names’ power.
Conclusion
In year 2004 licensing business shown tremendous growth, with notably 5.6 percent increment in entertainment, 3.8 percent in brands & trademarks and also showed good growth in other categories compared to 2003. The character and entertainment licensing industry has shown a steady growth over the last several decades and is making billions each year. This will ensure that there are bright prospects for all businesses, especially fashion, textile, and garment retailing.