Licensors of branded consumer products are still feeling the pandemic pinch.
That’s according to License Global’s annual report, which assesses the performance of licensing enterprises from shoe brands to car companies. Market growth is in the process of “shifting back” to positive after the second year of the Covid crisis, analysts wrote. The 88 licensors examined reported $260.8 billion in revenue over the course of last year, with 40 of them bringing in at least $1 billion in retail sales individually.
Companies that made the top 10 list showed the strongest signs of recovery. Disney is holding on tightly to its designation as the world’s biggest licensor of branded consumer products, having brought in about $56.2 billion in retail sales during 2021—a $2.2 billion increase from the year prior. Publisher Dotdash Meredith took the No. 2 spot on the list, with $35.9 billion in sales.
Meanwhile, Authentic Brands Group (ABG), owner of Brooks Brothers, Barneys New York, Forever 21, Aeropostale and other apparel and lifestyle brands, ranked No. 3—the only fashion firm to make the top 10. ABG was the list’s largest growth leader, earning $21.7 billion in 2021, a $7.9-billion increase from the previous year.
License Global attributed ABG’s success largely to a series of diverse and notable brand acquisitions. The group completed its acquisition of Reebok from athleticwear titan Adidas this spring, and finalized a deal for co-ownership of David Beckham’s lifestyle brand in late February. The famed footballer subsequently became a shareholder in ABG. Alongside Simon Property Group subsidiary Sparc Group, ABG acquired Eddie Bauer in early June 2021, and months later, bought Heritage Brands from PVH Corp. The $220-million acquisition included the Izod, Van Heusen, Arrow and Geoffrey Beene labels. The company was said to be eyeing a $10 billion valuation for its initial public offering (IPO) last year, though CEO Jamie Salter shelved the plan, indicating that ABG is targeting 2023 or 2024 instead.
Following ABG, the top 10 was rounded out by WarnerMedia, the Pokemon Company, Hasbro, NBCUniversal, Mattel, Bluestar Alliance and Paramount Global.
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Fashion enterprises on the whole surpassed 2020 revenue by $11.1 billion, painting an encouraging “overall picture of growth,” according to analysts. Players in the sector represent 7.9 percent of all leading international licensors assessed by License Global, responsible for $37.6 billion in revenue last year. And while entertainment companies dominated, making up nearly 30 percent of the top licensor list, fashion items were the undisputed leader for licensed products being sold at retail. Seventy percent of licensors said their licensees currently sell branded products like apparel and footwear, followed by entertainment content (60 percent) and home and beauty products (60 percent). Top sales channels include multi-category retailers or online marketplaces such as Walmart, Amazon, Aldi and Costco, analysts wrote.
The licensing industry is now “conditioning itself to prepare for market shifts and consumer behavior trends to change rapidly” throughout the remainder of 2022 and into 2023, they added. License Global’s enterprise survey highlighted the strategies that stakeholders believe will impact change across the industry, the most prominent being an increase in brand collaborations and partnerships. “Category growth and cross-category extension will be crucial,” they added, while solutions to the continued supply chain hurdles will continue to be explored. Companies projected that e-commerce will continue to grow, prompting an even more pronounced shift to digital, but experiential retail will continue to play an important role in reaching shoppers. Sustainability will impact all business verticals, they added, and many brands will display a pronounced focus on acquiring new talent while supporting their existing workforces.