We recently came across this great article on The Fashion Law titled “Licensing is One Fashion Trend that isn’t Going Away.”
The article lead with a succinct definition of licensing: “Licensing is the practice of contracting with another party to obtain and use rights intellectual property (“IP”) rights, in our case) in exchange for an agreed payment (a fee or royalty). A licensing relationship typically involves an agreement between a trademark owner (the “licensor”) and another party (the “licensee”) in which the licensor permits the licensee to use its trademark in commerce. Simply put, a license grants the licensee rights in property without transferring ownership of the property.”
So how does that relate to fashion? Well, many brands license out their brand name allowing the licensee to produce their trademarked product. The article continues, “Licensing is also a powerful way for a brand to grow by tapping into new geographic market and new market categories they simply are not equipped to cater to. Licensing out can help a company to commercialize its IP or expand its current operations into new markets more effectively and with greater ease than on its own.”
This is a great reason to consider licensing your brand since it’s very challenging to break into every market without huge amounts of capital. Licensing can present a mutually beneficial arrangement for both the licensor and the licensee to reach larger territories and increase brand capital.
Another excellent point the article highlighted, “Licensed products, such as eyewear and fragrances, which are sold at much lower price points than a designer dress, for instance, serve as a way to both profit and to court potential new customers. As of last year, about 90 percent of the $160 million a year in sales at Calvin Klein Inc. comes from licensing the designer’s name to makers of underwear, jeans and perfume.”
The ability to connect with audiences from a different price point is invaluable because it increases the worth of the brand and can be a very lucrative percentage of overall revenue as well. Clearly this fashion trend of licensing is here to stay.
Here at IBE we work with our clients to help them identify these opportunities and navigate these deals so that you can maximize your exposure while also maintaining the level of quality that your brand demands. Contact us today for more information on partnering with us in order to extend your brand into new territories.
- Posted by Tatiana J Whytelord
- On January 18, 2017