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Sep, 10 2010

Leverage via Licensing

FROM Marilyn Monroe to Pampered Girls, brands have made inroads into the hearts and homes of billions across the world, thanks to licensing that is leveraging brands and private labels into the fashion and apparel market across the world.

FROM Marilyn Monroe to Pampered Girls, brands have made inroads into the hearts and homes of billions across the world, thanks to licensing that is leveraging brands and private labels into the fashion and apparel market across the world. Strutting out with the best of the fashionable brands and accessories, which are already a rage in the west, the trend is catching up fast across the emerging nations.

Michelle Minieri, President, Bradford Licensing, says, “Fashion in itself has a global appeal. Trend-conscious consumers no longer have to look solely within their borders for latest brand products. In this way, licensed apparel and fashion can reach and influence buying patterns more efficiently.” For most of the international fashion and apparel brands, licensing has become a major way out for growth, profit and expansion.

Benefits of licensing

The benefits of licensing are estimated to be immense because it not only provides revenue streams, but also plays a pertinent role in enhancing brand awareness and encourages extensive reach through product extension.

Says Minieri, “Entertainment, fashion and sports have always been the leading segments in which licensed goods make most of the profits. Most goods that are part of any of these segments have a greater chance of succeeding if they are established brands.”

According to Ciarán Coyle, Managing Director, Beanstalk, “The largest category in brand licensing is in fashion and apparel. This becomes even more attractive as brands migrate to more risk-adverse model in terms of capital investment in brand extensions.” Fashion licensing can largely be divided into two categories, apparel brands and designer names. The priority of fashion licensing is brand extension, which is mainly obtained by designers through licensing products other than their main apparel lines.

Delay restricted growth

Though licensing has had a delayed arrival in India, it is all set for a firm growth in the years to come. So what are the factors that lead to the delay of licensing in India? Minieri says, “Up until about 10 years ago, most developed and developing economies like India were highly protected not only from domestic producers but also from foreign competition. The government imposed barriers on entry that greatly restricted international trade, impeding economic growth.”

However, with waves of licensing striking a fresh chord with the Indian market, optimism rules. According to Pradeep Hirani, Chairman, Kimaya, “It is a time-tested concept and is expanding very fast. Fashion licensing is creating a major impact and we should leverage this strength.”

Fashion designer Debarun Mukherjee says that with licensing, outlook of the Indian fashion industry is transforming in a big way. “I really support this because it will provide a platform to the fashion designers to showcase their merchandise and aid brand-building process,” he adds.

So what makes licensing the preferred tool for brand expansion in India? “Licensing is a flexible option in a situation where we want to bring an international brand of repute to our country. In our case, with Satya Paul accessories, we were already the market leaders as far as ties and cufflinks are concerned. By adding an international name in our portfolio, we can now give the customers a huge choice when it comes to men’s accessories and the international touch and experience. That is the reason why we are confident of the brand's expansion” states Rajiv Grover, VP Marketing, Genesis Colors.

Licensing in the Indian fashion and apparel industry has found a well-etched path in India with brands like Tommy Hilfiger, Esprit, Van Heusen and Louis Phillipe, Lacoste, Puma and Allen Solly taking up spaces on retail shelves, either through manufacturing licences or through direct retail arrangements.

Making a mark

International apparel brands also prefer licensing to enter the Indian fashion and apparel industry. Tie Rack London forayed into India through a licensing agreement with Genesis Colors.

Quips Grover, “In November 2009, two Tie Rack London stores were opened in New Delhi. Today, the brand enjoys presence in all key markets in India, as there are seven Tie Rack London stores across the country.”

Atulit Saxena, COO, Brands, Future Brands, states, ”We have been viewing our target plans and once the brand acquires volume and value, we would put it across, close to the consumer through licensing.” Incidentally, John Miller, a formal menswear clothing brand, has been one of the best performing labels by the Future Brands. S.Kumars Nationwide Limited (SKNL) and Donna Karan International (DKI) recently entered into a joint venture (JV) for strategic global licensing agreement. As part of this arrangement, SKNL (UK) Limited will source, design, produce and distribute the full range of DKNY menswear apparel.

Nitin S. Kasliwal, Managing Director and Vice-Chairman, SKNL, informs, “This joint venture with DKI is in line with SKNL's focus on aligning with the world's top apparel and accessories brands as part of our global growth strategy.”

Walk on the ramp

Licensing has entered into the catwalk culture with several leading Indian fashion designers licensing their merchandise. Manish Arora, Sabyasachi Mukherjee, Rocky S and Samant Chauhan to name a few have inked in licensing agreements either with corporate houses or have launched their own brand accessories line like bags, perfumes and home furnishings.

Mukherjee, who is hopeful of launching his own line of accessories and perfumes, says, “Licensing will be a natural process for my own line of accessories and jewellery. In the process, it will help designers and corporate houses in striking out great deals.”

Hirani feels, “Licensing leverages the strength of the designer label and supports the creative growth of the brand.”

So what are the basic parameters that an established fashion designer should look at while inking a licensing deal?

“Pedigree of the company, its infrastructure, future roadmap and logistical strength are some of the basic factors that should be kept in mind,” states Hirani. Grover affirms, “Brand name in the international market and financial position are the key factors.”

Future forecast

The future prospects of licensing are immensely bright, if industry experts are to be believed. Hirani affirms, “The market for licensing is hugely untapped and there is an immense potential for growth, combined with a positive outlook for the fashion industry in the years ahead.”

“The brand licensing industry is here to stay. With a boost in purchasing power, economically independent young executives and well-travelled mid-senior level employees , the retail industry will grow multifold and retailers would see licensing as a viable option,” says Grover.

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