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The Next Growth Surge

The Next Growth Surge
While many brand licensors and retailers have implemented various cost-cutting measures and expense controls over the past several years during the global economic crisis and downturn, they have also established strategic initia

While many brand licensors and retailers have implemented various cost-cutting measures and expense controls over the past several years during the global economic crisis and downturn, they have also established strategic initiatives that will prepare their companies for the next growth surge.

This fundamental business practice is what will separate the growth companies from the rest of the pack as global economies gradually improve and consumers start spending more freely once again. Now that's not to say that growth in brand licensing will return to the pre-recession levels of 2007 when it peaked, but it will slowly improve in 2010 and beyond.

For global brand licensors and retailers, it's simply about being ready for the next decade of growth. It will be defined by more sophisticated, multi-platform, multi-channel licensing and promotional programs that will have much longer life spans. In addition, this next growth phase will also leverage global licensing opportunities in a broader and deeper way than has been the case during the 2000s.

While many of world's largest licensors and retailers will drive this new growth, it will also result in a positive impact on smaller, local businesses, as well. Here are key examples of how some of the top 10 global licensors are preparing for the next growth phase.

  • The Hub, the new kids' TV network joint venture between Hasbro and Discovery Communications, debuts on October 10. Its diverse lineup of acquired and new programming offers a rich portfolio of licensing opportunities. The programs include: "Clue," "Animal Mechanicals," "The Adventures of Chuck & Friends," "Family Game Night," "G.I. Joe Renegades," "My Little Pony: Friendship is Magic," "Pound Puppies," "Transformers Prime," "Twisted Whiskers" and "The WotWots."
  • Nickelodeon and Rainbow, the Italian animation studio, announced a partnership last month bringing the popular property, Winx Club to the U.S. The agreement also includes the co-development and co-production of seasons 5 and 6 of the series, as well as all merchandising rights within the U.S., Latin America, Canada, the U.K., Australia, New Zealand and Benelux.
  • Saban Brands, which was just formed in May with a capital investment of $500 million, has quickly made two major brand acquisitions—Power Rangers and Paul Frank—that will have a huge impact in various international markets.
  • Iconix Brand Group acquired the Peanuts brand and other assets of United Media in April for $175 million forming a new subsidiary that is 80 percent owned by Iconix and 20 percent owned by the Schulz family. It broadens the Iconix portfolio of fashion brands and gives the Peanuts property new opportunities for international expansion.
  • Disney Consumer Products is once again bullish about growth with Toy Story 3, the largest grossing movie of the year and the largest licensed property, hitting $2.4 billion in retail sales in 2010. In addition to expanding its core franchises, including Disney Fairies and Disney Princess, DCP is committed to increasing its share of the boys' market based on several properties, including the Marvel franchises, Tron and Phineas and Ferb.
  • For Marvel, DCP continues the integration process, which will have a more noticeable impact across global markets in 2011 with Thor and Captain America scheduled for release.
  • Warner Bros. Consumers Products, with its Harry Potter franchise approaching its final theatrical release in 2011, has made a major commitment to the rich portfolio of super heroes from its DC Entertainment. WBCP is developing an extensive global licensing and merchandising program for Green Lantern, which is scheduled for release in June.
  • Phillips-Van Heusen acquired Tommy Hilfiger in March giving the apparel company a stronger global presence and greater opportunities for future expansion.
  • Sanrio, which celebrated the 35th anniversary of Hello Kitty last year, is making the most of its milestones celebrating the company's 50th anniversary kicking off with a huge event in November in Los Angeles and a collection of new licensed merchandise.

The exclusive cover story, FremantleMedia Enterprises ("FremantleMedia Enterprises: The G Factor") is another great example of the "think global, act local" philosophy and of a company that is well positioned for the future.

While growth is not a guarantee, these are some bona fide examples of why there is a positive outlook for brand licensing in 2010 and beyond.

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