Brand Licensing Regaining Its Breath
Sales of licensed products are heading up for the first time in five years, according to data from the Licensing Industry Merchandisers' Association (LIMA). The organization's 2012 Licensing Industry Report says the prior year saw a 5% year-over-year gain.
Marty Brochstein, SVP of industry relations at LIMA, says the gains for 2011 are due to the improved economy -- which, in addition to allowing consumers to spend more, also helps retailers try lesser-known properties and products on their shelves. The report also goes into the prominence of online retailers and e-commerce sites and of licensed merchandise from digital properties.
It finds that sales of character-related merchandise -- including celebrities and entertainment -- grew 4.4% to nearly $2.5 billion. The category includes everything from Jessica Simpson and Gwen Stefani to "Angry Birds" and the Disney Princess and Harry Potter.
Trademark and brand licensing -- the second-largest category -- grew 7.7% to $910 million, per the report. Sales of licensed fashion goods such as Perry Ellis, Polo Ralph Lauren and Liz Claiborne, rose 5.8% last year to $730 million. Sales of licensed gear from sports leagues like the NBA, MLB and NFL grew 3.9% sales to $670 million.
“The bottom line is, we’re seeing a huge growth in licensing across the board,” says Brochstein. He tells Marketing Daily that a couple of factors are boosting licensing revenue and activity. "The licensing business doesn't exist separate and apart from the rest of the consumer spend pattern, so consumer spending in general was up and that helped sales of licensed goods," he says, adding that marketers are now much less reticent about sending their brands to a babysitter via licensing partnerships. "Major brands have become increasingly open to the notion of licensing as opposed to dismissing it out of hand because you are giving up your family jewels to an outsider. I think over the past decade brand owners have increasingly thought of their brands as leverage-able assets."
That attitudinal shift, he explains, was forced by pressure on businesses over the past few years. "Now brand owners are asking what they can do that is not involving them in making huge investments in new product lines, but yet has the effect of increasing revenue."
Digital properties from applications ("Angry Birds" being the prime example) are also seeing a licensed-merchandise boom, per Brochstein. "It's a reflection of where culture is going. Remember that five years ago this business didn't exist. First there was the video game business -- Super Mario Brothers, for example -- and a decent amount of licensing from those worlds. But now the same thing is happening with apps. There's an alchemy to the licensing business, where for whatever reason one plus one can equal four because something just hits the consumer zeitgeist."