Byline: Kristi Ellis

LOS ANGELES — No blockbuster? Go with the classics.
That seems to be the strategy among retailers and manufacturers of entertainment licensed products when it comes to mapping plans for holiday merchandise.
While conceding that their summer films were disappointing at the box office, most major studios said that sales of licensed merchandise from those films were still good, though they will focus on the classics this holiday. The soft summer left many studio executives looking toward the future, particularly at potential blockbusters this Christmas, and planning far out. The consensus among retailers and studios is that the niche in children’s wear and juniors is dominated by licensed characters, such as Warner Bros.’ Looney Tunes crew or Disney’s Winnie the Pooh, Mickey Mouse and Minnie Mouse.
Licensed entertainment is a cash cow for studios, generating an estimated $16.7 billion in retail sales of all categories, including toys, annually, according to the Licensing Industry Merchandising Association (LIMA), which is based in New York and tracks sales of licensed products. Sales of licensed apparel and accessories are about $4.25 billion.
But sales have been flat this year, according to Beverly Cannady, a member of LIMA’s board of directors and owner of her own licensing consulting firm.
“Nothing has been real exciting except for the classics,” she said.
Topping the list are Winnie the Pooh, the Looney Tunes gang and George Lucas’s Star Wars characters.
The studios had to split up smaller pieces of a smaller pie, which was sliced up by five movies this summer. “Men in Black,” “Batman & Robin,” the rerelease of the Star Wars trilogy, “The Lost World” and “Hercules” all competed for market share.
“Movie execs and licensing execs were frustrated because the market was bombarded and shelf space was competitive,” said Daniel MacDonald, director of marketing for licensing at the Walt Disney Co.
Despite the crowded field, MacDonald said Disney did well with “Hercules” products this summer.
The studio is banking on the holiday release of “Flubber,” starring Robin Williams, with a barrage of licensed toys and apparel for children and adults. Products will be carried in Toys ‘R’ Us, Kmart, Wal-Mart and Target.
Next summer, Disney will release the animated feature “Mulan” and build licensed products around it in such categories as apparel, home furnishings and accessories.
MacDonald said that the studio is already looking at the holidays next year and banking on “A Bug’s Life,” for which it will launch licensed boys’, girls’ and adult products, and on the rerelease of “The Little Mermaid.”
“The absence of real blockbusters is a misconception,” said George Jones, president of worldwide licensing for Warner Bros., noting that theater performance is not necessarily indicative of merchandise sales.
For example, although the studio’s “Batman & Robin” did not break any records at the box office, Jones said that merchandise sales on the series of films have been strong, reaching over $1 billion worldwide at retail.
Merchandise sales on this summer’s “Batman & Robin” film were on a par with last year’s Batman movie.
Jones said Warner Bros. is gearing up for its next big film, “Quest for Camelot,” which will be released next summer.
The studio’s hottest licensed property at the moment is Looney Tunes.
Retail sales in the Looney Tunes category are over $4 billion in all categories each year worldwide, and apparel accounts for the majority of the volume, Jones said.
The studio pulled the Looney Tunes products out of traditional department stores because that tier of stores competes directly with Warner Bros. Studio Stores, which will number 180 by the end of the year. The product is still carried in such stores as J.C. Penney, Sears, Mervyn’s, Wal-Mart, Target and Kmart.
The newest licensed properties are Hanna Barbera and Cartoon Network, which Time-Warner Inc., Warner Bros.’ parent, acquired when it merged with Turner Broadcasting System Inc. a year ago.
Jones said that early product tests of the “Scooby Doo” characters have been successful and the company plans to launch a full line in upscale department stores.
Warner Bros. is also preparing for the release of “Superman Lives,” starring Nicholas Cage, in the summer of 1999.
Rosalind Nowicki, vice president of soft line licensing for Universal Studios Consumer Products Group, said that the studio’s focus on fashion direction led to the success of licensed merchandise tied to “The Lost World.”
Nowicki said that sales were higher for the sequel than for “Jurassic Park” because the line was more fashion-oriented and expanded in ready-to-wear.
“We aren’t just throwing a logo on a T-shirt anymore,” she said, adding that she considers branded designers such as Stussy and Mossimo to be competitors.
“We are competing with every fashion brand for the dollars,” she said.
The studio expects sales to continue with the video release of “Lost World” next month. Nowicki said reorders have been steady.
The studio’s biggest classic character is Curious George, and sales have been strong at retail. Universal has a licensing agreement with Sony Pictures to produce Curious George. The film will be released in summer 1999, and a range of licensed products is currently being tested in Wet Seal and Gadzook’s stores. The line incorporates popular athletic looks and ringer T-shirts.
Universal also launched its first major licensing program around a musical act, Aqua, for this fall and next spring.
“We are talking to a number of retailers about doing potential, exclusive programs,” Nowicki said.
The first deliveries will be in December and fashion will play a key role in the licensed products. There will be water-filled appliques on T-shirts, athletic looks, tank tops and body-conscious silhouettes.
“Kids get fashion cues from MTV and VH-1, and we want to target the hip, trendy market of 17-to-24-year olds,” Nowicki said.
Retailers have been “stung” by the scarcity of blockbusters and become more cautious, according to Charles Rialto, executive director of LIMA.
“None of the summer movies performed well,” said Julie Lennon, advertising manager for Mervyn’s, a division of Dayton-Hudson Corp., who oversees licensed products for the chain’s 274 stores. “They seem to be on a steady decline and the studios are being much more conservative.”
That conservatism has impacted retailers.
“If stores don’t blow out a huge amount of hot properties, they start to get nervous and a lot are turning toward the classics,” Lennon said.
Mervyn’s is one retailer that is currently focused on classic properties, but is keeping a watchful eye on potential blockbusters.
Mervyn’s, which carries entertainment properties in home furnishings, children’s and juniors, has had the most success with such characters as Bugs Bunny and Mickey Mouse, Lennon said. The hottest licensed property at the moment is Winnie the Pooh.
Lennon said that the stores did a steady business with this summer’s “The Lost World,” merchandise in the men’s and boy’s categories and with “Batman & Robin” in men’s and in shoes, but she noted that there were no standouts in the junior category.
Mervyn’s last successful licensed entertainment campaign was during the holidays last year when the company rang up over $6 million in sales of merchandise tied into “101 Dalmatians” over an eight-week period around the crucial Thanksgiving-to-Christmas period, according to Lennon.
This holiday, Mervyn’s is banking on the classic characters. Lennon doesn’t expect any real blockbusters until next summer with Disney’s release of “Mulan” and Warner Bros.’ “Quest for Camelot.”
Disney’s Mickey Mouse gang is driving sales at most of Sears, Roebuck & Co.’s Southern California stores, according to Joan Denny, district merchant for 17 Orange and Los Angeles County Sears stores.
The hot categories with these characters are intimate apparel, children’s wear and home furnishings.
In the junior category, Denny said flannel boxers bearing Mickey Mouse and other characters are among the bestsellers.
“Pooh is also back and big,” Denny said, noting that Sears has had a long-standing relationship with Disney.
“Disney is still number one for us, and we are going after the characters in ready-to-wear and accessories in the fourth quarter,” she said.
She is also planning to increase character products in intimate apparel in the next three to four months because the sell-throughs have been strong.
“I am looking for anything in intimate apparel,” Denny said. “If the manufacturers have it, we will test it in Los Angeles.”

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