Suppliers license in-house brands
February 24, 2003-- Home Textiles Today,
The names of most home textiles suppliers are virtually unknown to consumers, and many prefer it that way. Perhaps that is why licensing alliances continue to proliferate, particularly among smaller to mid-sized vendors.
But for those seeking instant brand recognition, there is a roundabout, yet tried-and-true solution that more and more suppliers are employing — licensing.
"We didn't have time to build up our own brand when Tom [Etheridge] and I bought Lacey Mills [in January 2001], so we did what we could to align with others who were the best at what they did and sought the best licensing partners we could, like Ralph Lauren, Waverly, Dupont, Veratex and Ritzenthaler, to help us make a name for ourselves," said John Hale, co-owner and vp of sales, Cartersville, GA-based Lacey Mills. "It was an old company that needed to get back into the marketplace in a strong way and a right way and licensing helped us do that."
Especially during this time of year when plans for product for the late summer and fourth quarter period needs to be finalized in order to be ready for shipping by July, many suppliers have found it necessary to link up with major — and most importantly, popular —lifestyle, juvenile, entertainment and artist licensors as a viable route to better placement on store shelves and stronger sales at the cash register.
Sony Pictures Consumer Products is taking a second round with Danville, VA-based Dan River for its Spiderman license, for which there is a movie sequel later this year. When the movie released last year, the bedding manufacturer produced the bedding collection, "and today almost one year since its release we are still seeing 60 percent to 70 percent sell throughs because Dan River has really done a phenomenal job," said Juli Boylan, senior vp, domestic sales and retail development, Sony Pictures Consumer Products. "To expand a property into home textiles, you've got to be sure you've got a successful property so that your home textiles lines are equally successful. But once you've accomplished that, the program really takes off and [the home textiles] become a critical aspect of the property. It helps us because we want to be sure we are in every department at retail."
In the past year or so, this industry has seen a proliferation of partnerships between home textiles suppliers and licensors. Examples include Care Bears with The Northwest Co. for throws and with Franco Mfg. for juvenile bedding and plush pillows; Liz Claiborne with American Pacific for bedding, bath and window coverings; Donna Karan with CHF for the designers Home and Life collections; Waverly with Oxford Bath for bath coordinates; Joseph Abboud with Divatex Home Fashions for bedding; The Kellogg Company with Teka for beach and bath towels and kitchen textiles; and Susan Sargent with John Ritzenthaler Co. for kitchen textiles.
"Licensing has gotten really hot right now," said Stanley Mieszkowski, vp of sales and marketing, Port Washington, NY-based The Northwest Co. "It's cyclical … Now all of a sudden [kids] are watching TV again and going to the movies. And as a result they are getting a chance at becoming fans of … characters."
When shopping for home textiles partners, the criteria licensors use include proof of "strong design capabilities, excellent retailer relationships and a commitment to produce a full collection of products, not just select items," said Debra Joester, president and ceo of The Joester Loria Group, which is the licensing agent for many properties like Care Bears, Jeep and The New York City Police Department, among others.
"Today's consumer wants a complete package that offers a number of decorative options," Joester said. "We need to be able to offer them a one-stop shop."
Added Tracey Moses, vp marketing, Karen Neuburger Ltd., "We look for licensee partners that fit in with our overall distribution strategy. A potential partner must understand and support our vision, as well as be able to deliver high-quality products that represent what customers have come to expect from us. It is a company that works with as a partner with us."
But the trick is to pair up with the promising properties before they make it big.
"There's no real recipe for picking the right license; it's intangible," Merle Johnson, vp of marketing, Sugar Valley, GA-based Mohawk Home, said. "Who knows why Tickle Me Elmo was so big. It just was. You need to consider the publicity for that property and the history of a type of property and do your best."
Mohawk recently partnered with Susan Sargent for area and scatter rugs, decorative pillows and throws and is working hard to help promote that line through cross-merchandising with Sargent's other licensees, particularly Lexington for furniture.
Cross-merchandising happens to be a vital aspect of licensing for many home textiles suppliers.
CMI, based in Pawtucket, RI, strongly considered cross-merchandising efforts before it recently signed its first-ever licensing partnership with designer Lynette Jensen, said Don Scarlata, president and ceo.
As a result, the braided rug manufacturer has entered a new channel — quilt shops — it otherwise might never have.
Similarly, Greenville, SC-based 828 Trading Co. signed its first license, with Cabana Joe, as a means of breaking into new stores, like furniture dealers and home accessory shops, John Shepherd, ceo, said.
Mohawk Home has experienced continued success with its licensed programs, seeing growth in excess of 15 percent per year over the past three years, with the majority of those sales generated by products other than rugs. As a result, the multiple-category manufacturer and importer is looking to continue adding to its already large list of dozens of licensing partnerships.
"Mohawk Home is making a concerted effort to increase licensed products, particularly the entertainment and sports properties — properties like Scooby-Doo and Blue's Clues have such staying power with kids," Johnson explained. "You need a full assortment to get placement at stores. Retailers are looking for partners that have the best of everything — full coordination and good properties that consumers recognize as brands."
Dalton, GA-based Shaw Rugs knows that all too well. With more than 30 licensing partnerships under its belt, the area rug supplier is now looking to slow that pace down a bit and focus its efforts on building its best programs, including Kathy Ireland, Martha Stewart, Jack Nicklaus, the PGA and Tommy Bahama. Currently, licensed products comprise about 60 percent of Shaw Rugs' total sales revenues, Kim Barta, brand manager, told HTT. But due to heavy royalty fees associated with licenses that the company has to pass along in part to its vendor partners, Shaw Rugs is now making stronger efforts to build it house brand.
"We have been looking at cutting back the number of licenses we work with and in exchange building up our own brands, such as Heirlooms," Barta explained. "That way we will have to pay less on royalties and we can offer our dealers a good price on our items without passing on to them extra charges, and at the same time increase our profits."
Related Content By Author
Industry Related Content
Explore Latest Business Trends at Heimtextil