Product Branding and Licensing in the Apparel Industry

Product Branding and Licensing in the Apparel Industry
By: Bruce S. Berton , October 2008

□ Consultants Corner □ News □ Consulting □ Manufacturing Clothing □

I have been requested to write an article on this topic. I am a professor at the Fashion Institute of Design and Merchandising (FIDM), which has four locations in California. It is a required course that I teach to all students in the Apparel Manufacturing Program.

To become a Brand in the U.S. marketplace, you must be knowledgeable in the following areas:

1. The 3 R's of a brand: Retailing, Retailing, and Retailing

2. Changing consumer dynamics

3. Cultural trends and fashion

4. The shifting powers of brands

5. Technology and logistics

6. A complete understanding on a daily basis of everything from preschoolers to grandparents, tweens, teens, and the ever increasingly individualistic mass market

7. Copyright, trademark, and patent legal issues

8. Brand/label registration in the U.S.A.

9. Code of labor compliance and ethics agreements

10. Rights to import and export

11. Fiduciary responsibilities

12. Royalties

13. Licensing, licensor, licensee

14. Managing agent

15. Licensing agent

16. Merchandising, marketing, and advertising

All of the above items must be part of your knowledge base in order to build a brand, purchase a brand, or license a brand. The Chinese in most instances are buying brands for whom they were the private or OEM manufacturers, and desire to go direct to the retailer and eliminate the so-called middlemen. The other way is to license a name brand that will be well known by the consumer, but not necessarily in your specific product arena. You can build a brand by using all the above, but be prepared to put up a lot of monies to build a branded product.

Do your homework and research first, in order to know the levels of market for the product. In the marketplace there are many labels, but to build a BRAND with national or global recognition is a very costly process. Licensing a brand and paying royalties seems to be the best way to enter a specific retail to consumer area. There are many recognizable brands in one sector that might be the least costly to license and distribute into the market.

Many brands are losing their market share mainly because of large age group shifts, and many new potential brands are coming from other industry sectors that might be applicable to build on, with the least amount of monies. NIKE tried to enter the surf industry for over five years and lost millions of dollars. They finally bought Hurley instead, and now have great sales and distribution.

Know what you can produce, understand your customer, and then seek the most straight forward approach. Just make sure you have controls in place to allow for expanded sales revenues!

By: Bruce S. Berton

Bruce S. Berton is a business and management consultant with Stonefield Josephson, Inc., a leading regional consulting and accounting firm with offices in Santa Monica, San Francisco, Walnut Creek and Mexico City. The information in this column is of a general nature. Readers inquiries are welcome; and may be sent to Bruce Berton, at Stonefield Josephson, Inc., 2049 Century Park East Suite 400 Los Angeles, California 90067 310-432-7437 Direct
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