Matching Licenses to Rugs
June 18, 2007,
Who would have thought soft flooring would make a new canvas for Andy Warhol's art, or a place to tee off for PGA aficionados?
Licenses are abundant in the rug category, and are plentiful in design range.
But logic is not always woven into a rug made under a licensed brand. As suppliers can attest, a brand doesn't have to make sense to make money in the rug industry. While the brand is the bait, the hook is the quality of the rug paired with the design and color used in the brand's interpretation.
"I can't tell you licensing is beneficial to the product itself," said John Shepherd, ceo and president of 828 International Trading Co., based in Greenville, S.C. "I don't think a celebrity or whoever necessarily brings sales to it. The rug has to be a good product, have the right colors, be made of a good quality — these are necessities if it is going to work. It's just not going to sell if it's not good."
Suppliers can certainly test that theory across a wide selection of properties — including many that did not start out in the home arena. 828 has the license for PGA Players. OW/Sphinx partners with Andy Warhol and National Geographic; Shaw Living with Kathy Ireland; and Milliken with more than 200 colleges and universities.
"It seems everybody wants to get into the licensing business, but you really have to focus on your own business first and weigh it out to see what brands really fit," urged Kim Barta, brand manager for Dalton, Ga.-based Shaw Living. With almost a decade of licensing experience, the company has fine-tuned its brand count to a more manageable size.
"Today our focus is to be true to the brands we currently have so we can service them and grow them," Barta said of Shaw's current roster of licenses, which includes Kathy Ireland, Tommy Bahama, Jack Nicklaus, and Mary-Kate & Ashley. "Before you start signing on new licenses, you have to be sure you don't add on new brands that take market share away from lines you already have. You need to ask yourself if they can add new distribution, does the brand call for a higher margin, does it offer designs you can't already create on your own, is it a look you need?"
Saddle Brook, N.J.-based Nourison kept those factors in mind as it has grown its licensed programs over the past several years.
"We're very conservative with our choices, and we pick brands we can fill a niche with, and brands that do not compete with us as a company," explained Julie Rosenblum, brand manager, Nourison. "The idea is not to swim upstream. We want brands that are natural fits for us." These include Court of Versailles, Calvin Klein, and most recently Liz Claiborne, which was added in January.
In themes, Traditional American seems to be successful for 90-year-old family-owned and operated Capel Rugs, based in Troy, N.C. Its licenses include Colonial Williamsburg, Biltmore Estate, Country Living, and Bob Timberlake — the latter being Capel's longest at about 15 years.
Explained vp, sales Allen Robertson, "These licenses beg a better quality. For the consumer these brands, for example, validate the product," he said. "When they buy something, they want something that assures them it is quality. We can enhance our brand with the right license brands."
Suppliers don't argue that brands with legs in the home industry make life easier on both parties, licensor and licensee. Candice Olson is an example of this, said Steven Mazarakis, president of Brooklyn, N.Y.-based Hellenic Rug Imports. His company has the license for area rugs for this star of HGTV's "Divine Design" program.
"Candice Olson is probably the most popular and best license we have now," Mazarakis said. "It is directly related to what she is doing. Her TV show is based on her design. Her license is easy to promote because it relates to her work. People know her style and what she is about."
Mazarakis added that the Olson program "makes more sense to me now than some of the other licenses we've worked with in the past." Hellenic has been working with licenses since the late 1990s. "I've learned it has to be a big name, and related to our industry," he said, "It can't just be a name you want for the sake of putting a name up there, and slapping it on our product."
Safavieh's Arash Yaraghi, a company principal, agrees. Having inked his first such partnership three years ago with famed interior decorator and designer Thomas O'Brien and his second and last with Martha Stewart Living Omnimedia less than two years ago, Safavieh has been more cautious about moving into licensing. "These aren't just two celebrities who attach their names to products," Yaraghi explained. "They are experts who have something to say about home décor. Who better to design rugs?"
To that, Dalton, Ga.-based Sphinx might ask — How about Andy Warhol? The company's first license, it proved to be "a huge success for us. It exceeded all of our expectations," said Jonathan Witt, executive vp.
"It was a nice fit for us as a first license because it is contemporary and our company is known for contemporary and transitional looks," he continued. "There was definitely a synergy there."
Since then, Sphinx has added National Geographic and Woolrich to its portfolio.
"I don't think any license is successful because of the name," Witt said. "I think the product has to be good looking and something people want in their houses …. We get a lot of phone calls from other licenses and some great names associated with home and not with home, looking to partner with us. But we are very careful as to who we select."
Similarly, Shaw Living argues that its seven-year-old Kathy Ireland brand is a model of success in licensing, a brand not originally rooted in home.
Barta emphasized that it takes commitment from both parties — licensee and licensor — to make the product work. "You need to be able to say yes I can commit to this — and if you don't it dies out," she said. "When we signed with Kathy Ireland, she was not in home like she is today." While it can be difficult launching a new-to-home brand, Barta said, "You draw attention to a brand through advertising and point-of-purchase materials and dealer advertising. Also, we have had Kathy make appearances at market and that draws excitement because they get a chance to talk with her and learn more about her and her brand."