Clothes may make the man (or the woman), but they alone are often not enough to support a designer brand.
After diving into licensing about 14 years ago, Badgley Mischka has churned out its share of licensed goods — some succeeding more than others.
A home and furniture collection, girls’ apparel, girls’ footwear and a fragrance are among Badgley Mischka’s 10 or so licensing deals — some of which have yet to be released. The Pastourelle-licensed children’s dresses and Synclaire-licensed footwear will debut at the designers’ show tonight. The founders also recently inked a licensing deal for a new Los Angeles flagship on Sunset Place.
The designers’ licensing efforts first got rolling in 2004, when Candie’s Inc. (which was later renamed the Iconix Brand Group) bought the Badgley Mischka label from Escada. Unlike Badgley Mischka, Candie’s business model was all about licensing, which was a new direction for the eveningwear designers.
When the deal closed for an undisclosed sum, Badgley Mischka had yet to establish a significant stable of licensed products that generally provide the royalties needed to support a runway collection. The designers were ready to change that, as was Candie’s chairman and chief executive officer Neil Cole, who pointed to the “enormous potential to expand the product” as one of the selling points. Accessories, footwear and handbags, in particular, were “no-brainers” from his point of view. In turn, Candie’s marketing and licensing prowess appealed to Badgley and Mischka. And in the years that followed, lingerie, wedding gowns, bridesmaid dresses, handbags, a bridge collection and swimwear were among the licensed products that were introduced.
In March 2016, the Iconix Brand Group sold the rights to the Badgley Mischka IP to Titan Industries Inc. in partnership with the brand’s founders and the apparel licensee MJCLK LLC for $16 million in cash. Eight years before that MJCLK was formed to acquire the Badgley Mischka apparel licensee from the Iconix Brand Group. Badgley Mischka president Christine Bell Currence said, “From that day forward, the team evaluated every decision with an ownership lens as opposed to a traditional licensee looking to monetize at every turn.”
The arrangement allowed for Badgley and Mischka to focus more on the creative side of the business, while Currence can be more nimble in addressing the changing retail landscape. All in all, the team takes a holistic approach to licensing. The company has about 10 new categories, but its footwear and apparel licenses currently account for 75 percent of all sales. Taking a measured approach is a priority, Currence said. “We’re not just collecting royalty checks and signing up with the biggest companies that want to give us ‘X’ amount of dollars.” Currence said. “We’re really working with these companies to really build up their businesses.”
Last year’s launch of licensed sportswear has been a key element of the company’s growth, and it was triggered by customers’ requests for more casual glamour. Through a joint venture with the China Ting Group, everyday pieces like relaxed trousers, jackets, coats, sweaters, T-shirts and daytime footwear were introduced. The latest collection is geared for boardrooms or school drop-offs. Staying true to the brand’s mission statement — “Badgley Mischka defines timeless glamour that creates confidence and passion,” is a constant regardless of the category, according to Currence.
In January, the label signed a beauty license with TPR Holdings LLC, which also owns Mally Beauty, Cargo, Oscar Blandi and other brands. During the Iconix years, the fragrance was handled through Estée Lauder. In April, the second collection for home was introduced with PTM Images. Always evolving, the offerings include an assortment of items including picture frames, dog bowls and other accents for interiors. Most of the business is done through decorators who can choose fabric and work with Badgley Mischka furniture partners to customize chairs or couches.
Last year, footwear sales increased by 40 percent, due to the introduction of the more affordable Jewel brand and the momentum behind the signature brand, according to Joe Ouaknine, president of Titan Industries and ceo of Badgley Msichka. The all-synthetic secondary footwear collection is priced about 50 percent lower and is sold via Macy’s, Nordstrom and full-line departments stores.
Ouaknine attributes the success to the label’s “great product” with an appropriate quality-price ratio, and the founders’ demeanor. “To me, these guys have always been celebrities in terms of who they are and what they stand for. They have this base of runway clothing that they are known for,” he said. “We started offering shoes that related to their clothing.”
He has seen the designer company change through his 14-year alliance with the brand. Recalling his first meeting with the founders, Ouaknine said, “I did not know how to pronounce the name, how to spell it and I wasn’t so sure about the prospect of a shoe license,” he said. “What drew me in was the opportunity to do business with Neiman’s and Saks because my company did business with all the other department stores, but not those two.”
As it turned out, that plan didn’t pan out with Neiman Marcus and Saks opting not to buy the first footwear collection. Ouaknine said, “I was trying to get out of the license by paying Iconix a fee, and they wouldn’t let me out. They said, ‘Nope, you’ve got to stay.’ We tried and tried. In the third year of the three-year licensing deal, as I was counting the days for the contract to expire, things started to roll. I went to Iconix and asked for an extension for five years. I was afraid they were going to take advantage of me. I thought for sure they were going to say, ‘Well, if you want to sign, it’s going to cost this much and this much. But they didn’t.’ he said. “And from there, it went great.”
Citing the CFDA’s “Glass Runway” survey, which revealed only 14 percent of the world’s major fashion brands are run by female executives, Currence noted that she and her senior team of executive vice presidents Lara Piropato and Kimberly Lee Siu are proud to be an exception to that rule. In addition to having women and girls model on its spring runway, Badgley Mischka will be spotlighting a variety of women leaders and entrepreneurs when it relaunches its Web site in October/November. By sharing their stories, the company plans to blend messages of women’s empowerment and glamour.
The executive team also feels emboldened to strengthen its licensing sales. Currence said, “In the grand scheme of things, Badgley Mischka was such a small piece for the Iconix Brand Group, which was more of a Walmart-Macy’s driven business. There wasn’t much focus on Badgley Mischka. That’s what was such a great opportunity for us. Since acquiring the brand name in 2016 from Iconix, sales have grown 24 percent.”
When the new two-story Los Angeles store opens this fall, there will be a V.I.P. area and select, one-of-a-kind offerings for shoppers. Built in 1935, the yellow Classic Revival mansion at 8619 Sunset Boulevard was once home to Max Azria’s offices and an Hervé Leger store prior to that. But the building’s heritage as a major Hollywood booking agency is what appealed to Badgley and Mischka, according to Piropato. Louis Armstrong and Ella Fitzgerald frequented at that time, and the historic address also was featured in the movie “Scarface” and the introduction to the TV series “Charlie’s Angels.”
Merchant Financial Group’s president and chief executive officer Adam Winters has ties to the designers’ company beyond his own 10-year professional relationship. His grandfather, who worked in the factoring business decades ago, first started working with Badgley Mischka in the Eighties. Merchant Financial Group currently provides Badgley Mischka with factoring and working capital lines of credit.
Winters declined to comment on just how much financing the company provides. He said, “We’re very supportive. We give them a substantial line of credit. When they had the opportunity to purchase the brand back, from a consulting standpoint and a financial standpoint, we were 100 percent behind helping them get their IP back. It’s an iconic brand. It’s timeless. We’re 100 percent confident in the brand and its place in the market. We felt strongly that given the opportunity to get their IP back, there was no way we weren’t going to make that happen.”
Winters pointed to the brand’s longevity and how they have stood the test of time, while others have faltered. “They continue to push on, to grow their business, and the categories in which they’re doing business. Again, it’s just a testament to the strength of management. It’s just the vision of Mark and James.” he said.