Fashion brands couldn’t escape an erosion in their royalties last year, but their decline was smaller than most other classifications of intellectual property and the universe of North American brands.
Fashion brands took in $775 million in royalties last year, down 4.3 percent from $810 million in 2007, according to the annual Licensing Industry Survey conducted by the Licensing International Merchandisers’ Association, released on Tuesday. Overall, royalties declined 5.6 percent in North America to $5.66 billion from $5.99 billion in the prior year.
The figures refer to the origin of the brands and not to the categories of merchandise for which they’re licensed. For instance, character licenses, by far the largest category in the LIMA survey, logged royalties of $2.61 billion, down 3.9 percent, but much of the merchandise sold under those licenses was in apparel and accessories.
Following characters in royalty revenue, but a distant second, were corporate trademarks and brands, down 8 percent to $975 million, followed by fashion and then sports, down 9.2 percent to $740 million.
The only category to escape a decline in royalties last year was collegiate brands, which grew 3.5 percent in royalty revenue to $208 million. The largest decline, outside of the catchall “other” category, was art, where royalties sagged 12 percent to $154 million.
“Given the economic climate, the revenue declines are not unexpected,” said Charles Riotto, president of LIMA. “However, a strategic, thoughtfully implemented licensing program remains a very effective way for businesses to build their brands, drive incremental revenue and position themselves to thrive in a rebounding economy.
“It’s more important than ever for brand owners to identify brand extensions that will support and enhance their core businesses, while retaining flexibility to be there when consumers are ready to buy,” he concluded.
The results were culled from companies in the licensing business, examination of public financial documents and interviews with licensing industry executives.