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Licensees change to try to accommodate strapped retailers
Published February 2, 2009
Attendance was sparse at the recent Sports Licensing & Tailgate Show in Las Vegas, but even show organizers acknowledged that with the low expectations generated by a moribund economy, they weren’t entirely disappointed. As a matter of fact, even with less than stellar attendance and only a few licensors exhibiting, including MLS and CLC, show organizers are planning a second sports licensing show for early June in the East, likely New York. They are still planning a return to Vegas next January.
Ironically, the Licensing Industry Merchandisers’ Association’s longtime June show is moving from New York to Las Vegas this year, although that show has always been far more dependent on character and brand licenses than sports. “Buyers are telling us they want a show in the East at another time,” insisted show director Ann Keusch.
Not that we didn’t see some business being written within the booths at the Sands Expo Center, notably those filled by G-III Sports, WinCraft and Fathead. Even those licensees were hard pressed to talk about anything but the economy, since their retail partners have been in economic disarray for 12 to 18 months. Because many hard-line licensees are relatively small operations, overall questions of endurance were paramount.
“We thought team licensed sports apparel was recession-proof, and for many years it was,” said Eric Schapiro, vice president at G-III, which was showing various activewear lines to complement its traditionally strong outerwear offerings. “If you are into any business that is selling in to retail, now you are taking a hit, because their consumers aren’t buying now. For us this year, it’s about increasing sales to our existing customers.”
Noting the January bankruptcy protection filing of Against All Odds, a 64-store retailer, as a recent example, Schapiro spoke for many licensees when he said, “The unknown for us is who’s going to survive in the retail community.”
Like many licensees in Vegas, WinCraft had problems late last year.
“We had a great 2008 going, but the business changed for a lot of us in the fourth quarter,” said WinCraft President John Killen. Things changed enough that WinCraft lowered its minimum order quantity on most items from six pieces to one. Still, Killen said his company’s average order stayed the same, in terms of dollars.
Fathead, one of the most compelling licensing success stories of recent years, has seen sales slow because of the relatively high prices of its oversized “wall graphics.” The solution: a plethora of lower-priced products designed to grab Fathead shelf space this spring at mass merchandisers like Wal-Mart and Target. A new Sidekick product, about half the size of the original Fatheads, will sell for $30 to $50, said CEO Brock Weatherup. Skins for PCs and portable gaming systems will run from $15 to $25.
“We always knew we’d get into mass,” Weatherup said. “Economic conditions got us there faster. It’s a time to do new things.”
Innovations side, everyone on the show floor was hoping for some, or any, evidence of a changing consumer mind-set.
“This industry isn’t absolutely suffering like the auto business, but there’s a psychological barrier,” said MLS consumer products chief Stu Crystal, who is looking for a fourth-quarter turnaround. “Until people think the economy has bottomed out and is coming back, they won’t start spending.”
NAME GAME: Among the more innovative products at the show: Jersey Driven had patented wristbands fashioned after jerseys with embroidered names and numbers and licenses from the NFL, MLB, MLS and NBA. Retail priced at $10. My.i-Grill, a portable propane grill with built-in speakers and an iPod input, will be marketed with collegiate indicia, though it was not displaying models with those logos yet (suggested retail price: $150). We were also impressed by WinCraft’s premium felt pennants, made of a new fabric that resists damage, so that if you crumple them up they spring back to their original condition. With the innovation comes a new retail price point of $8… In the “never seen a logo on that before” category were artificial Christmas trees, wreaths and palm trees from Team Trees. The Nicholasville, Ky., company had the faux flora in school colors like Tennessee’s iridescent orange, with a license on the accompanying pole or tree skirt. A 4-foot tree with LEDs included will retail for about $60. A ceramic planter (MSRP $8) with a Yankees logo was displayed at the Team Beans/Forever Collectibles booth. Given its recent success in reusable shopping bags with licensed images, Forever was showing a variety of those licensed shopping bags, with and without photographic images, and some with embroidery, which retail for $2 to $6. We also enjoyed the woven baskets with collegiate licenses and colors from Eagles Wings, St. Cloud, Fla., that retail for $35. Following our long-held theory that anything new in the gift market will inevitably carry a license, we saw college-logoed airplane neck pillows (MSRP $17) from SchoolFanatic.com, Waco, Texas.
RACING OUTDOORS: NASCAR is in the early stages of crafting an outdoors licensing program, catalyzed by the knowledge that hunters and fishermen are two to three times more likely to be NASCAR fans than their stay-at-home pals. NASCAR is looking to assemble licensees for an outdoor line, including everything from woodsy home décor to camouflage apparel, to be sold in retailers like Cabela’s and Bass Pro Shops. Also intriguing is a deal that director of licensing Paul Sparrow is engineering for a NASCAR-branded GPS system that will feature a racing thematic and use race imagery on and within the GPS. Gentlemen, start your satellites.
LICENSING LINES: Along with the economy, the brain drain at the NFL’s consumer products group was the subject of considerable chatter on the floor of the Sands Expo Center. Taking the NFL buyout package, and with it a good portion of that league’s institutional memory in the licensing business, are Gene Goldberg, vice president/new business and product development; Susan Rothman, vice president of consumer products, who headed apparel and had more than 12 years with the league; Gail Martin, who had 25 years with the league, most recently as director of consumer products/apparel; and Peter Zeytoonjian, another director. The “voluntary severance packages” were offered in December to about 400 NFL staffers with more than five years of service. The league hopes 150 will take the severance deals, so it can reduce staff by 10 percent to 15 percent. Salaries have also been frozen at NFL headquarters.
Terry Lefton can be reached at email@example.com.