The old mantra in the footwear and apparel sectors was to "control the destiny of your brand."
But a handful of companies over the past few years is now taking this strategy to a new level by becoming "powerhouse" brand management firms. These innovative companies include Iconix Brand Group Inc. and NexCen Brands Inc. as well as Payless ShoeSource with its recent acquisition of Collective International LP, owner of Airwalk and Vision Street Wear.
Iconix and NexCen own a stable of brands that are licensed to retailers and vendors. In the case of Payless, the company sells Airwalk in its retail stores and is expected to extend and license the brand.
Gilbert Harrison, chairman of Financo, which advised Payless on the Collective International deal, said by owning the Airwalk brand, Payless can invest in the brand "while at the same time developing products and further brand extensions, which will give the company an edge in the market."
Harrison said Payless chairman and chief executive officer Matt Rubel "has brought a new dynamic approach to Payless, which includes looking at the business as a 'house of brands.'"
Harrison said the approach is innovative, and Payless should now be looked at as two businesses: "Payless the shoe store, which is the largest in the world in terms of retail stores, and Payless the New York Stock Exchange company that owns additional brands to develop and grow."
Rubel has been hard at work creating a brand house that includes offering licensed footwear brands such as Spalding, Champion, Dunkman and Tailwind, among others. When the deal was announced earlier this month, Rubel likened the Payless brand strategy to that of Iconix, which owns a variety of brands such as Badgley Mischka, London Fog and Joe Boxer.
"Brands are everything," Harrison said. "And [Rubel] knows brands very well. And he knows that brands have the most value if you capture them for use in your own business and license the brands to other companies as well."
Payless doled out $91 million for Collective International. Industry sources said the lion's share of Collective's revenue stream was in sales of Airwalk. Bruce Pettet, ceo and president of Collective International, will remain.
A Stella McCartney sketch of a custom dress made from protein-based silk in partnership with biotech lab Bolt Threads. The dress will be displayed at The Museum of Modern Art's upcoming design exhibition, "Items: Is Fashion Modern?"