Licensing industry turns cautious
Associated Press
NEW YORK — After getting burned by too much licensed merchandise from years past — from Star Wars to Godzilla — the licensing industry has gone on a crash diet.
Associated Press
Retailers, including Toys R Us and Sears, Roebuck & Co., and a slew of manufacturers are becoming more choosy in selecting a property. They're also demanding exclusive rights to properties or to specific categories, whether it's in apparel or toys. Meanwhile, big Hollywood studios, like Sony Pictures, are streamlining their movie merchandising programs in response to slowing demand.
Longtime Hawai'i resident Wally Amos passes out treats from Aunt Dellaâs Cookies while his Chip and Cookie characters, foreground, adorn his table at the Licensing 2001 trade show at New York's Javits Convention Center.
This more cautious approach to licensing, which has gained momentum in the past six months in light of a consumer spending slowdown, was clearly evident Tuesday, the start of the three-day annual licensing trade show, which features 4,700 properties.
Such properties ranged from classics like Sesame Street to established corporate brands like Coca Cola. And, of course, there was a slew of hot new items that are being billed as the next Pokemon, the Japanese characters that have generated $10 billion in revenues worldwide since 1998.
They include Just Group PLC's Butt Ugly Martians, imported from Britain; and 4Kids Entertainment's Yu-Gi-Oh, based on a Japanese character, and its property Cubix, based on a computer-generated animated series that will be on Kids Warner Brothers television this fall.
4Kids Entertainment brought Pokemon to the States.
"It's a little glum out there," said Chris Byrne, an independent toy consultant. "There has been so much licensed goods. Retailers are looking for ways to distinguish themselves. This is all changing the dynamics of licensing. Licensing alone isn't enough to get people into the stores."
"There is a mood of caution," said Charles Riotto, president of the International Licensing Merchandisers' Association, the sponsor of the show.
He said that retailers "are looking for exclusives. It's about having something that your competitors don't have and that your customers want."
Looking to be different
Joe Bonnici, a buyer for Myer, an Australian department store with 70 stores, is becoming more selective. In the past, his company competed with its rivals for the same properties.
Now, "we just need to differentiate ourselves," said Bonnici, who was at Crank2's She's Charmed & Dangerous booth working out a deal to be the exclusive retailer in Australia to sell some of the teen products, which span from accessories to rag dolls.
Clearly, licensing has become more important. An increasing number of companies, including newcomer Kellogg Co., which made its debut here, are looking to license their brands.
Ad agency Young & Rubicam is developing a licensing division for its clients. Meanwhile, the irreverent Gene Simmons, front man for rock legends KISS, who was at the show, is bullish about plans to triple the band's merchandising empire to $1.5 billion in revenues.
His latest gimmick? A "KISS Kasket," which can double as a coffin or wine cooler. The metal coffin, which will retail from $4,500 to $5,000, will be sold on KISS's Web site and to funeral homes.
"It serves two purposes. You can have your last ride with your favorite band. But while you're living, you can have a cold one," said Simmons, dressed in black pleather pants, and a black jacket.
After several years of just 2.5 percent gains in growth, the U.S. licensing industry saw an uptick in sales last year. It posted a 4.4 percent gain to $97 billion in sales at retail last year, Riotto said.
Licensing marketers were determined to get attendees excited at the event.
New cookie in town
Longtime Hawai'i resident Wally Amos, founder of Amos Cookies, was baking chocolate chip cookies to pitch his new licensed property Chip & Cookie, based on chocolate chip characters developed with his wife Christine. Hollywood studios were promoting their upcoming films with mammoth booths and private screening rooms. Amos brought his now famous chocolate chip cookies to Hawai'i in the mid-1970s, and was soon an island-adopted son.
Meanwhile, Warner Bros. also was there, completing merchandising plans for its upcoming fall movie "Harry Potter and The Sorcerer's Stone," based on J.K. Rowling's best-selling first volume of the Harry Potter series.
"Retailers are looking for success, and we think that this movie will be huge," said Dan Romanelli, president of Warner Brothers worldwide consumer products division. A limited amount of merchandise did not do as well as expected, according to sources. That's not stopping Warner Bros., which believes movie-related products, which will be in stores six weeks before the film's release, will fly off the shelves.
"The industry is going through some growing pains. I think there was too much hype surrounding certain properties," said Al Ovadia, executive vice president of Sony Pictures' consumer products. "Retailers are taking more of a wait-and-see attitude."
That's why Sony is cutting back on its licensing programs. For example, for Sony's "Spiderman" movie, to be released next May, will sign up between 45 and 50 licenses. Normally, it would have 100, he said.
