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InsideFMM | October 25, 2014

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Mid-Tier to Luxury Fashion Brands Open Their Doors to Licensing

Licensing in fashion used to be invisible. Some might argue that it’s meant to be invisible, but Versace H&M Fashion Preview Marketingthis is changing. And fashion is changing with it.

What is licensing exactly? One person, a licensor, has some intellectual property. Something that multiple people think is cool. Another person has nothing cool, but they have a clothing factory. Person A, the licensor, rents her coolness to person B, the licensee, for a price.

How it used to work

Licensing has been around since the birth of the fashion business. You don’t think Dior sits up in his penthouse hand-sewing gowns do you?

Licensing and high-end fashion used to only go one way: out. This means that a popular designer would sell his or her designs or other intellectual property to a manufacturer for a fee. The manufacturer would sign an agreement (some more detailed than others) promising to meet certain standards of quality and manufacture–using quality fabrics, stitching and certain techniques–to ensure that when a department store shopper picked up a Chanel suit, that suit was flawless. The designer’s vision executed perfectly.

These agreements were all invisible, behind-the-scenes. It was considered bad taste to talk about this aspect of the business.

Times have changed

The Licensing Industry Merchandiser’s Association estimates that fashion licensing generates $810 million per year. That’s a lot of couture.

Designers are licensing out their designs and their brand names for fashion, accessories and more. They are selling high-end fashion to both high-end and mid-tier retailers. And they are making A LOT of money doing it.

Licensing out

Perhaps the most recent and ridiculously successful example of fashion licensing is Target’s direct-to-retail partnership with legendary Italian fashion house Missoni for a limited-edition collection of apparel and accessories for women, men, girls and baby, as well as home goods including bedding, dinnerware, stationery and décor.

Founded in 1953, Missoni has been praised worldwide for its unique knitwear in eye-catching mix-and-match patterns, colors and textures. The brand is known as a luxury item.

The line was affordable, priced from $2.99 to $599.99, with most items less than $40. The collection went on sale Sept. 13. Target’s website crashed. Most items sold out the first day, with a fair number of items showing up on Ebay soon after. Target had to apologize publicly for not being prepared to meet the demand.

We may have to expect a repeat in February when Target launches its limited-edition Jason Wu line.

German designer Jil Sander licensed her brand to a completely different category of merchandise: she launched the first smartphone preloaded with branded material.

The Jil Sander mobile phone contains exclusive content including a mobile application, access to behind-the-scenes photos and videos and a store locator. It runs on Windows OS. This means that Jil Sander is now bigger than fashion: she is a lifestyle brand.

Like Fila. They are more than just athletic shoes. Fila Luxembourg recently signed an agreement with Berkshire Fashions for the design, manufacture and sale of Fila branded accessories for the U.S. market. The line launches this fall, featuring a wide variety of men’s, women’s, boy’s and girl’s styles which will include headwear, cold weather accessories, sweatbands, bags and water bottles.

The licensing division of Perry Ellis International, PEI Licensing just signed an exclusive license agreement with 1928 Jewelry Company to manufacture, design and distribute fashion jewelry products under the Laundry by Shelli Segal brand name. 1928 Jewelry will produce necklaces, bracelets, rings, earrings, pins and hair jewelry.

This agreement is like those Russian dolls where you pull it apart and you find another doll inside. A designer develops a brand that buys another brand and then licenses that brand to someone to make something completely different, but cool in the same way the brand is cool.

And that’s how you got those earrings you’re wearing.

High-end fashion is now licensing in

Over the past few years there has been a growing trend in high-end fashion of licensing in, which means that high-end designers are paying royalties to use some sort of recognizable intellectual property in the designs.

This used to be considered tacky. The only clothing companies licensing in were low-end and mid-tier retailers selling t-shirts and sweatpants. Now the business is very different.

Gossip Girl Fashion + Marketing

Exhibit A: Gossip Girl. Warner Bros. Consumer Products and Warner Bros. Television Group partnered with Romeo & Juliet Couture for a Gossip Girl–inspired apparel collection, “Gossip Girl by Romeo & Juliet Couture.” The line hit high-end fashion retailers including Kitson, Neiman Marcus and Saks Fifth Avenue to support the premiere of season five of the CW show. The collection launched September 26th; the designs were inspired by the characters in the series and includes tops, dresses, bottoms and outerwear priced from $80-200. There will be handbags and accessories for the spring collection.

Style icon Darren Romanelli has taken this trend one step further: he’s made Beetle Baily couture. Not only that, Romanelli’s display at February’s PROJECT trade show in New York was so compelling that he inked a deal with Bloomingdales.

Thanks to a license from King Features Syndicate, Romanelli has created an exclusive Americana and military-infused collection for men and boys featuring images of Beetle Bailey and Popeye. The limited-edition line is only available at Bloomingdales, and features high-end apparel, accessories, and collectible items from renowned brands including Converse, Medicom, Psycho Bunny, Junk Food Clothing and Altru, among others.

Combining the original cartoons from legendary Beetle Bailey cartoonist Mort Walker and Popeye creator Elzie Crisler Segar with today’s hottest fashion trends, Darren Romanelli has curated a collection that stays true to the classic properties and celebrates both the Army and Navy.

Last year, Disney Consumer Products collaborated with renowned jewelry designer Tom Binns for a stunning jewelry line to support Tim Burton’s Alice In Wonderland. Actually, Disney had several high end fashion deals to support this film, this one just happens to be my favorite.

Disney partnered with Bloomingdale’s for one-of-a-kind window displays at Bloomingdale’s flagship 59th Street store in New York City that highlighted all the high end lines for the film, with additional displays and signage in key locations around the country, including Beverly Hills and Los Angeles.

Some deals go both ways

Yes, dear reader, it is possible that one fashion brand can license another fashion brand that it admires to produce branded merchandise. Take Estée Lauder: the company’s Aramis and Designer Fragrances Division acquired the exclusive worldwide license for the fragrance business of Marni, a Milan-based luxury fashion company found by Consuelo and Gianni Castiglioni in 1994.

Marni is a lifestyle brand in its own right. The brand has a unique, playful charm built on experimentation and research, exclusive prints, combinations of textures and colors. The first product introduction will be unveiled next fall.

Frankly, we can’t wait.

But here’s what we really want to know: What do you think of the new trend of “licensing in” in high-end fashion? Would you pay $500 for a piece of couture fashion that featured a cartoon character? Does Missoni seem less appealing to you now that they’ve sold products at Target? Will you buy the Versace + H&M collection launching this week? How do these agreements affect your perception of the value of these high-end brands?

Do tell.

Comments

  1. Mikelah

    Licensing In and Out is a great way to expand luxury brands to a different market, mostly for that guy or girl who would never purchase (or can’t spent) at luxury purchase, but enjoy being fashionable at the right price. It can create a sense of brand loyalty as well. For example If I purchase a Missoni for Target Dress at 21 yrs old and I can afford the luxury brand when I’m 30, since I’ve been introduced to it at a younger age I’ll tend to go back to that same brand for bigger purchase. Additionally, for the luxury brand it may minimize some the “knock off” creations if they collaborate with stores at a lower price point.

    • Marguerite Darlington

      I agree! I think that the success of the Target Missoni deal proves that there is a huge market for these limited edition collections. Quite excited to see the Jason Wu line myself. :)

  2. Lan

    It maybe a good way for high end brands to bring a bunch of cash, but they might lose their “soul”…

    • Marguerite Darlington

      Good point. It must be done carefully.

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