The important, but often tricky, venture of licensing a brand carries many risks and rewards, two experts told a group of innerwear executives last week.
In a seminar titled “Licensing, Branding & Strategic Alliances — an Art Form and a Science: Why, How and What to Expect,” Andrew Jassin, managing director of the Jassin-O’Rourke Group, and Sidney D. Bluming, a partner at Meister Seelig & Fein LLP, offered their expertise to about 80 industry insiders. The event, hosted by the Intimate Apparel Council, a division of the American Apparel & Footwear Association, was held Wednesday at the Union League Club in Manhattan.
Jassin, a 20-year veteran of the apparel industry, said he is approached on a daily basis by manufacturers that want to license a brand, but are clueless about developing brand identity, integrity and consumer recognition, as well as understanding the nuances of setting up a licensing agreement, especially in tough economic times.
“Hardly a day goes by where I’m not asked the question, ‘Can you find me a company to license my brand to like a Target or Costco?’ No one here has experienced the roller-coaster ride we’ve been going through [this recession],” said Jassin, who started his career at the Karl Lagerfeld unit of Bidermann Industries, pioneering a worldwide licensing and manufacturing operation. “Licensing encompasses three areas: branding, private label and product development.”
Jassin, who also has served as president and chief executive officer of several operating divisions of Jones Apparel Group, outlined the mechanics of a successful venture, which include:
• Can you describe what distinguishes your brand from the competition?
• What constitutes success?
• Can you survive economic downturns?
• Do you have a logo or trade style that is memorable?
• Do you have a specific sales budget and do you plan for your open-to-buy ahead of time?
• Do consumers respect your pricing and positioning policies with repeat purchases?
“If you have a good idea and a business plan, don’t be vague about your brand’s DNA,” Jassin said. “You need to make the consumer the owner of your brand, and do it over and over again. Brands are something consumers think about, even if they don’t buy them. The key to success is a marketing plan and knowledge, management, design and creating information flow. Most importantly, share information.”
A big part of a winning strategy revolves around product presentation, placement, position, feedback and a targeted consumer base, said Jassin.
Bluming, who has practiced in the corporate, commercial and intellectual property areas for more than 40 years representing manufacturers, designers, retailers, fashion models and athletes, said it is paramount to pick the right partner.
“I’ve seen so many deals go up in smoke because the parties fall in love with a brand, but they never really explore the partnership,” said Bluming, whose expertise includes trademark, copyright, software and domain names. “When you find the right partner, you need to trust them.”
He noted that candidates for strategic alliances include companies that have traded beyond their financing capacity, firms that need better logistics and better administrative controls and brands beyond the start-up phase that could not survive without a strong partnership.
“There are critical components to a licensing agreement, such as defining the trademark and exclusive rights to do designer X,” Bluming said. “You can sign a deal and later find out another company is also doing designer X. You have to make sure the licensor is not giving you a variable guarantee. There’s also trademark registration. Get to know who’s standing behind the rights of the brand and define the product category for the licensed brand. Also, get to know the channels of distribution for the brand, especially with what’s happening now at retail, where the people who used to shop at Saks are now shopping at Macy’s and also shop at lower channels of distribution.”
Bluming said it’s important for a licensor to “create an image at a threshold level and then let your licensee invest.”
Alberta Ferretti's "Rainbow Week" sweaters are back. The designer closed her #MFW show with a few day-of-the-week sweaters, which first debuted on the catwalk last January as part of the pre-fall 2017 collection. #wwdfashion (📷: @delphineachard)