BRANDS AND LABELS: THE ISSUES
DESIGNERS: A LICENSE TO PROFIT
Byline: Janet Ozzard
NEW YORK — The designer licensing strategy has been going full throttle this year, continuing to be a key tool in building a fashion brand.
High-end names such as Calvin Klein and Ralph Lauren keep looking to expand their product categories, while mass-market giant Wal-Mart had a blockbuster launch of its Kathie Lee Collection.
Produced under license by the Halmode division of Kellwood Co., the Wal-Mart omnibus brand plays off the name recognition of TV personality Kathie Lee Gifford. The concept came from the highly successful Jaclyn Smith multiproduct line for Kmart Stores, a line that posts annual sales of about $150 million.
But thanks to Wal-Mart’s clout, the Kathie Lee Collection is expected to have first-year sales of close to $200 million. Kellwood, which holds the license for Arizona Jeans, the $500 million label that’s exclusive to J.C. Penney, is also looking to expand the David Dart label, acquired this year, into licensed categories beyond its sportswear core.
Probably the biggest licensed name in the news this year was Klein, who has been aggressively building his name through licenses of widely distributed categories such as jeans, fragrances and underwear. It hasn’t hurt the designer’s business that he’s backed these products with constant, provocative and often controversial advertising.
The momentum from the gender-bending ads for the CK One unisex scent, considered one of the most successful fragrance launches ever, carried over to the relaunch of the CK jeans line and the refocused CK bridge line. CK One, which was released in fall 1994, did an estimated $50 million to $60 million just in the months between its launch and the end of the year.
Ralph Lauren has also built a highly recognized name through categories such as home products and fragrances. After retrieving his women’s wear license this year from Bidermann Industries, Lauren has set a course to increase his business there. He said he intends to build that side of his business up from its current wholesale volume of about $150 million to rival his $550 million men’s wear business.
Among his first moves were to sign a license with Jones Apparel for a better-price women’s line which will appear in spring 1996 under the label Lauren by Ralph Lauren, and a jeanswear license with denim manufacturer Sun Apparel.
But keeping control of image is crucial when entering the licensing field, no matter the size of the designer’s business.
From the beginning, The Donna Karan Co. has avoided licensing to the point that almost all categories are produced in-house with the exception of hosiery, innerwear and fragrance.
“We do what we do best,” president Stephen Ruzow has said in describing the company’s philosophy of keeping business close by. It’s the only sure-fire way to avoid diluting the invaluable designer image, Ruzow feels.
When choosing a licensor, the most important thing is “creative freedom and high standards,” said Cynthia Rowley, who has four licensees so far — for sewing patterns, shoes, optics and knitwear. Rowley is working with a licensing consultant, Jeffrey Ceppos, who she said is “keeping me very busy lately.”
“You have to have a pretty strong signature image first, or licensing can dilute your image,” said Rowley. “There’s a big difference between licensing your name, and licensing your designs. My assistant, Rebecca, and I design everything that has my name on it.”