Licensed for growth
Maria Weiskott -- Playthings, 8/1/2001
While the traditional U.S. toy industry may be circumspect these days regarding licensed product, there apparently is less apprehension in other niches of this burgeoning business, one that is estimated to draw $175 billion annually on a global scale.
According to a recent study co-sponsored by the International Licensing Industry Merchandising Association (LIMA), entertainment/character licensing continues to be the strongest category, maintaining a 44.3 percent share of the market. The trademarks/ brands and fashion categories are next in line at 16.8 percent market share each.
With lifestyle items commanding an increasingly larger percentage of kid purchases, traditional toy retailers may want to consider including such products along with their usual merchandise. Some already are, cashing in on a new brand of young consumer.
Kids of the 21st Century are losing interest in traditional toys as early as 8 years old and even children this young are looking for trendy lifestyle items with brands they recognize and to which they are developing a loyalty.
The junior and tween markets are very brand conscious, notes Dana Sheill, vice president of licensing/brand management for Gotham Licensing Group. "They want to wear a brand from head to toe," she says.
Diane Stone, producer of the recent LIMA Licensing 2001 International show, notes that, as fashion brands expand into new categories like bath and body products and watches, the "power of licensing" can help generate new streams of revenue.
Product with licensed entertainment/ music presents the biggest draw, as witnessed by its 44 percent market share. Since 1999 the dollar volume of retail sales of products based on recording industry celebrities and personalities alone has grown 23 percent in retail sales, according to industry statistics, contributing $1.9 billion in retail sales last year.
With a wide variety of merchandise available including apparel, toys and stationery, music and entertainment merchandising is growing to include more products for young consumers including jewelry and backpacks, that can appropriately be included in the mix of toy store offerings.
Licensing is becoming a diverse business notes Charles Riotto, LIMA president. "The industry does not live and die through one property alone," he says.
It's a fact that may be welcome news to cautious toy retailers.
Opportunity does not rest on one property, Riotto adds, nor do revenues.
