Richard Seesel

BrainTrust Query: The Torrid Truth about Licensing's Love Triangle

March 9, 2010

FROM RETAILWIRE:
Licensors are just as aware of rationalization as licensees are and they are appropriately freaked out about it ... but sometimes for the wrong reasons. How has ongoing rationalization affected licensing? Is the traditional model less attractive than in the past?      [more...]

The Iconix model is a good example of how the traditional "licensing triangle" is changing. There are fewer national retailers, and they are interested in margin growth as well as development of exclusive brands. So it makes sense for these stores to go straight to the master licensee to lock up distribution rights and to do their own product development and sourcing. The result: One of the three sides of the traditional "triangle" is cut out of the picture, unless the retailer decides to source product from a prior license-holder.

All the more important, therefore, for licensees to reexamine their business model, to make sure they are relevant to the new breed of mega-retailer.