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Fashion Licensing Sales Reach $16.9 Billion in 2013

Licensed products continue to enjoy growth as sales in the sector increased for the third consecutive year.

Sales of goods bearing character likenesses, corporate branding and sports team logos, reached an estimated $5.655 billion in royalty revenue in the U.S. and Canada in 2013, an increase of 3.3% over the previous year, which translates to $115.75 billion in retail sales, a 3.25% uptick, according to the International Licensing Industry Merchandisers’ Association’s (LIMA) Annual Licensing Industry Survey.

The report attributes the sustained sales success to the industry’s five largest categories: character, corporate trademarks, sports, fashion, and collegiate, which, together, accounted for 94 percent of overall licensing revenues in 2013.

“Licensing activity enjoyed strong growth in 2013, reflecting the importance of licensing as a business and marketing tool,” LIMA President Charles Riotto said. “Our industry and our members continue to strategically leverage the equity of their brands, characters, and intellectual property with even more creative and robust licensing programs that successfully connected with consumers and drove healthy sales.”

The following are a few highlights from the report:

  • Character-related merchandise (encompassing Entertainment/TV/Movie and Celebrities — The largest classification, accounting for $2.66 billion in royalty revenues and an estimated $51.44 billion in retail sales, up 4.3% from 2012. Royalty rates are generally higher in this category compared with others, accounting for 47.2% of total industry revenues.

Key Findings: Digital technology continues to adversely impact the appeal of traditional toys, and the world of digital apps has created new brands that have expanded to both digital and physical retail channels.

  • Corporate and Brand Name — Licensing royalties in the second largest category were estimated at $965 million, representing about 17.1% of industry revenues, and an estimated $22.5 billion in retail sales, or 19.4% of the overall licensed retail business.

Key Findings: Strong growth in home improvement and home decor are expected this year and in the future.

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  • Fashion — The third largest category in licensing, Fashion royalties rose to an estimated $770 million, accounting for 13.7% of total revenues, up 2.0% from the prior year. Based on these royalty rates, retail sales of licensed fashions translated to $16.9 billion in 2013.

Key Findings: The changes in the industry are being driven by greater use of exclusives for mid-tier and mass merchandising segments. Category growth is linked to beauty (i.e., fragrances/perfumes) as well as strong performance in the apparel and the accessories segments.

  • Sports (Leagues, Individuals) — Consisting of major sports leagues, which account for a majority of the licensing revenue generated, royalty revenue rose 1.9% to $698 million over the previous year, translating into retail sales of about $12.8 billion.

Key findings in the sports sector included the need for longer strategic partnerships, continued reorganization at retail, growth opportunity in retailers’ own label products, and direct-to-consumer sales through digital and specialty physical channels. Extending sports properties in healthier food and beverage segments, travel and the women’s market is also expected to be an important long-term opportunity.

Timed with the report’s release, LIMA is sponsoring the Advanstar-produced Licensing Expo 2014 taking place in Las Vegas this week, where more than 5,000 brands and properties are exhibited or represented.

At the show, Kathy Ireland, named one of the 50 most influential people in fashion, announced a return to sportswear in a partnership with BBC Asia Group, LLC, whose apparel brands include JouJou Jeans and Dollhouse.

Robert Soffer, owner of BBC Asia Group, who will serve as brand manager for Kathy Ireland Life and Style line to be launched later this year said, “We are pleased to be collaborating with the kathy ireland Worldwide team on the release of the vibrant new Kathy Ireland clothing line with denims to be released this year and outerwear next year.”