Fashion Licensing : The business of licensing has roughly been around since the birth of the fashion industry. Licensing in the industry identifies with trademarks, including designer labels and brands. Design and patent rights are principally licensed to a third party for only manufacturing purposes, while marketing, advertising and distribution are taken care of by the brand owner. While a brand usually controls the core categories of its products, it resorts to licensing of product lines that are used to broaden its portfolio such as fragrances, cosmetics, accessories and even home décor.
The brand/designer, referred to as the licensor, offers its trademark/label to another company that makes other types of products. This ‘other company’, commonly referred to as the licensee, determines whether or not to manufacture and distribute the new product lines of the licensor. Designers more often than not take benefit of their own brand names to expand by licensing into product categories that are related to their core categories.
Many brands may extend out licenses to makers of unrelated items that essentially serve as extenders of the brand name into generally unattainable markets. Licensees take advantage of this and join their products to an established brand and gain out of the rewards that go along with it.
Cosmetics and beauty products are most commonly licensed as they undergo a tedious procedure of production, but are widely distributed in drug stores and duty free stores.
A brand image can be in jeopardy if a licensor does not have appropriate control of its licenses. For instance, when Rose Marie Bravo took over at Burberry and started remaking the business, the very first thing she did for damage control was to buy back numerous licenses that were initially distributed. Before Bravo joined in October 1997, Burberry was a “check design company heading towards oblivion”, drowning in multiple licensing deals that were causing damage to the brand’s image, such as chocolate teddy bears covered in Burberry patented check-printed foil, being sold as ‘official’ merchandise. In the process of buying back all the redundant licensees, the brand was able to regain the control of its image.
Licensing is not only a way for brands to skyrocket their businesses but also present themselves as whole and complete. It is however, a two-way street. Stable expansion is a fulfilling dream; nonetheless, choosing the wrong licensing partner can backfire and result in costing the brand its reputation and sale numbers. A brand may start its journey with couture, its strength may lie in bespoke leather products or it may have built a reputation for fine jewellery – but it is still expanding its business in order to present a full portfolio of products, but how far it should go into it is an inescapable concern.