Leveraging Licensing to Generate Revenue with Private Label Home Products

1. E X A M I N I N G B E S T P R A C T I C E S A T R E T A I L
A N H F N P U B L I C A T I O N
FALL 2019
PRIVATE LABEL
HOME
Licensed to
Thrive
Licensed private label
products are resonating
with consumers

2. 8 FALL 2019 | PRIVATE LABEL HOME8 FALL 2019 | PRIVATE LABEL HOME
Private Label
Licensed to
THRIVE
From Global Icons’ Fred Segal licensed
collection, exclusive to CB2

3. PRIVATE LABEL HOME | FALL 2019 9
Licensed products, including retail exclusives,
are resonating with consumers
S
ome industry insiders call it a “game,” but
don’t be misled by the label. Licensing is
serious business.
Increasingly, manufacturers and retailers are em-
ploying licensing to get farther, faster. For some home
companies and retailers, licensed products deliver differ-
entiated assortments, especially when they are exclusive.
For others, licenses open the door to a new demographic,
or create a halo effect that burnishes the company’s im-
age. And most see licensing as a way to boost sales.
The Licensing Letter, a respected source for licensing-in-
dustry professionals, has been tracking licensed sales for
over 30 years. This trade publication estimates the global
licensing market is worth $174.54 billion, with the U.S. and
Canada responsible for more than $110 billion.
According to Licensing International, the leading trade
association for licensing worldwide, global sales of li-
censed merchandise in 2018 grew to $280.3 billion, in-
cluding an increase of about 4 percent in the home dé-
cor and housewares categories, with combined sales of
more than $27.2 billion. The U.S. and Canada comprise
58 percent of these sales.
While the methodologies used by these two
esteemed groups result in dif-
ferent totals, the takeaway is the
same: licensed products are
resonating with con-
sumersinabigway,as
evidenced by increas-
ingsales.Thisistruefor
all types of licensing,
Nash chair and ottoman in the Kim Salmela for Norwalk collection
COVER STORY
S
ome industry insiders call it a “game,” but According to Licensing International, the leading trade
by Michelle Lamb and Leigh Ann Schwarzkopf
Recent introductions from the Justina
Blakeney x Loloi collection
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COVER STORY
including a growing range of exclusives that can become
literalordefactoprivatelabelprogramsformanufacturers
or retailers. But private label licensing, which can also be
knownasdirect-to-retail(DTR)licensing,haslotsofcom-
petition from other types of licensed arrangements.
The Traditional Take
Traditionallicensing,inwhichalicensorworkswithlicens-
ees (typically manufacturers) to create products that are
sold to retail buyers, is probably the most well-known li-
censing method. Currey & Company’s Bunny Williams,
Barry Goralnick, Aviva Stanoff and Denise McGaha collec-
tions—all of which the company points out are success-
ful—are examples of this approach.
Currey&Companytypicallysignstwo-yearlicensingcon-
tracts,yetmostofitsagreementshavegoneonmuchlon-
ger. Currey favors licenses that offer looks its own design
team is not developing. It must add to the overall mix of
Currey&Companyproductsinafresh,newway,whilealso
fitting with the company’s business model.
At Century Furniture, traditional licensing is a growing part
of the business. Century prefers to work with AD100 top
interior designers, whose names consumers know and
trust, and whose styles consumers want to emulate. Cen-
tury’sVicePresidentofMerchandisingChuckAutenpoints
to successful collections with Thomas O’Brien and Wind-
sor Smith as proof that this is a winning strategy. Thomas
O’Brien licensed furniture has been so popular that Cen-
tury will add to it at the fall High Point Market. Items will
feature natural woven materials, like seagrass and rattan,
that infuse O’Brien’s modern-traditional silhouettes with a
casual and relaxed character.
Loloi’s Cyrus Loloi sees its traditional licensing relation-
ships as long-term commitments. That’s why Loloi strives
to align with brands and partners that will be relevant for
many years. Current Loloi collaborations include Magno-
lia Home by Joanna Gaines, ED Ellen DeGeneres, Justi-
na Blakeney and Rifle Paper Co. Different customers are
drawn to each license. And while all have achieved suc-
cess,generatingbothdollarsandexposuretonewmarkets,
each one has done it differently. Some have built steadily
overtime,andothershavebeenhitsoutofthegate.
A variation on that model, with retailers supporting a li-
cense across several departments, working with licensees
insteadofthelicensor,continuestobeviable.Inthesesce-
narios, a retailer’s senior leadership gets behind a property
and recommends that buyers collaborate on displays and
promotions. Crayola has found success within this model
at retailers like Bed Bath & Beyond and Target online with
products like Siscovers bedding, which contributed to
Crayola’s $215 million in 2018 licensing sales.
Aviva Stanoff’s Forest Light Chandelier for Currey & Company
Products from Meredith’s Better Homes & Gardens licensed
collection at Walmart

5. 12 FALL 2019 | PRIVATE LABEL HOME
has been an exclusive, two-season DTR licensing agree-
ment with CB2. According to Jeff Lotman, Global Icons’
CEO, Fred Segal products exceeded expectations, and the
two parties are involved in conversations about expanding
the program. At the same time, Global Icons is looking at
taking the brand to other retailers, with select products or
new items that consumers have not yet seen.
Ranked number two on License Global’s just-released Top
150LeadingLicensors,mediaandmarketingcompanyMer-
edith Corporation reached $25.1 billion in licensing sales in
2018, an increase of $1.9 billion over 2017. A portion of
these sales were in private label-like programs.
Meredith’sBetterHomes&Gardensprivatelabel-li-
censing relationship with Walmart has lasted 20
years. Meredith and Dillard’s began develop-
ing Southern Living branded products about
10 years ago. Toye Cody, executive director
of brand licensing, Meredith, said that doing
some of the heavy lifting for these retail-
ers—providing category research and all the
branding elements, like a turnkey marketing
package—can cut the time to market by as
much as one half. Still, she says, a major fac-
tor in the longevity of both programs is the
ability of each side to listen to the other.
Biltmore Hotel Scrollwork Bedding,
exclusive to Belk
Warren Schorr, Crayola’s vice president of business devel-
opmentandgloballicensing,pointstocategoriesfromcraft
and toys to apparel and bedding as vehicles for the color,
creativity and self-expression that Crayola stands for. A dry-
erasecoatingdevelopedbylicenseeIdeaPaint,whichallows
any color paint to become a chalkboard surface, will launch
atLowe’sinSeptember,increasingCrayola’sfootprintthere.
The Tasty Touch
Privatelabel/DTRlicensingisanotherapproach,andit’sget-
ting lots of attention lately. While there are many success
stories to point to, Buzzfeed’s Tasty program at Walmart is
one of the market’s biggest.
Buzzfeed’s senior vice president of global licensing, Eric
Karp, says the company launched its first Tasty collection
withWalmartinMarchof2018.Therelationshiphasworked
wellforbothcompanies.Infact,BuzzfeedseestheWalmart/
Tasty connection as a cornerstone of Tasty’s rapid growth,
callingitcriticaltotheirsuccess.Today,Walmartistheexclu-
sive home to non-electric Tasty housewares. These prod-
ucts helped fuel $135 million in licensed-product sales for
2018. Optimism about this program is one factor in Buzz-
feed’s forecast for double-digit growth in Tasty-licensed
items going forward.
GlobalIcons’FredSegalbrandhasagoalofbringingLAstyle
totheworld.Oneimportantsteptowardaccomplishingthis

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COVER STORY
Taking the Long View
Like Meredith, Gibson Overseas is also in it for the long
haul. David Nicklin, senior vice president of marketing and
licensing, says it’s far too expensive for all parties involved
to get in and out of licenses quickly. That’s why they focus
onlongevity,acknowledgingthatdesignelementslikecol-
or can change, while the brand personality stays constant.
Gibson’s Pioneer Woman licensed product, exclusive to
Walmart,hasremainedrelevantthroughvariousevolutions
overitsfive-yearlifespanbyfollowingthisstrategy.
While Biltmore offers traditional licensing arrangements,
direct-to-retailandexclusivedealsarealsoimportant.Tim
Rosebrock, vice president/general manager, licensing,
saysDTRdoesmorethaneliminatestepsandgetproducts
tomarketfaster.Justasimportantly,thoseproductsoften
enjoy higher success rates because of direct input from
buyers, who know their shoppers so well.
The story behind their inaugural collection for Belk
demonstrateshowDTRcanspeedthingsalong.AfterBilt-
more reached out to Belk, the initial line took only nine
months to develop and complete. Today, Belk carries
hundreds of exclusive Biltmore SKUs, as well as domes-
tics, cookware and other exclusive categories.
Laura Aldrich is the executive vice president of licens-
ing for Scott Brothers Global, the international enter-
tainment company founded by brothers Jonathan and
Drew Scott. She says its licensing revenues of $310 mil-
lion in 2018 more than doubled from the prior year. DTR
programs, she says, help her company focus on specific
market niches. Scott Living custom-framing products,
available at Michaels through Aaron Brothers Custom
Framing, have been sold for about 18 months.
The Hybrid Model
Of course, hybrids of private label/DTR and other ap-
proaches are not only possible, but increasingly com-
mon. Case in point: home-textile maker Eastern Ac-
cents’ Alexa Hampton licensed decorative top-of-bed
collection was developed to work with Hampton’s line
forfine-furnitureproducerTheodoreAlexander.Eastern
Left: Alexa Hampton’s Baynes collection for Eastern Accents
Above: Scott Living window treatment products are available on smithandnoble.com and fabric.com
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732.243.9888
mng@qualiaglass.com
qualiaglass.com
• customization targets
your customers
• in-house design team
• wide variety of
designs for all
occasions
• state of the art
glass work
BLING WITH STYLE
Accents will launch another designer collection, this time
with Charlotte Moss, exclusively on Perigold, the online
luxury retailer. This collaboration will carry only the Char-
lotte Moss brand.
Louise Traficanti, design director, says licensed collec-
tions that become de facto private label programs offer
Eastern Accents a lower level of risk. In the case of Alexa
Hampton, for example, the designer brought the The-
odore Alexander opportunity to Eastern Accents. Items
were designed specifically to work with Theodore Alex-
ander collections.
Whereas Eastern Accents created a collection for one
manufacturer, doing the same for a specific retailer can
be a starting point for future “partnerships.” That’s the
word Caroline Hipple, president of Norwalk furniture,
prefers to “licensing.”
In Norwalk’s first collaboration with Kim Salmela, the
company produced her upholstered line for One King’s
Lane. Sales were so strong and the relationship was so
positive that creating a collection for Norwalk dealers
was the next logical step. Today, Norwalk is manufactur-
ing another Kim Salmela collection that is exclusive to 85
Crate and Barrel stores, as well as being available online.
This product is branded Kim Salmela, and Norwalk’s name
does not appear on the product at all.
Five years ago, a licensing relationship in which the mak-
er’s name does not appear on the product would have
been unheard of. Today, this is just one of many different
formats in which licensed product is coming to market.
Clearly, the days of one-size-fits-all licensing are over.
Instead, there is a continuum of models that give brands,
licensees and retailers myriad ways to reach consumers
and sell more product. PLH
Cosmic Burst Supreme is part
of Crayola’s licensed
textiles collection