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What Will Luxury’s Big-Money Licensing Deals Look Like Post-COVID?


The workings of the market for licensed goods have been influx in recent years, as at least some luxury names have sought to bring operations in house or at least closer to come (via joint ventures, for example) in a larger quest for greater control over manufacturing and distribution. Hardly a little-known endeavor, the fashion industry is inundated with the byproducts of trademark licensing (i.e., the practice by which a trademark owner, the “licensor,” permits another party, “the “licensee,” to use its trademark(s) in connection with specific products or services), whether it be branded sunglasses, best-selling fragrances, jewelry collections, or designer cosmetics.


Over the years, well-established luxury names, having built their businesses on garments and leather goods, have looked to the likes of Coty, L’Oreal, Puig, Perfumania, and Inter Perfumes to produce trademark-bearing fragrance and beauty collections, and/or to Euroitalia, Marcolin, Marchon, Safilo, and Essilor-Luxottica in order to offer up logo-bearing eyewear, thereby enabling an expansion their operations into new product categories and geographic markets with greater ease than if they were to do so in-house. These more accessible offerings ensure that luxury brands not only reach new demographics of consumers, but they also allow them to boost their bottom lines in the process.

As a whole, the size of some of fashion’s most notable licensing deals – and the categories they fall into – are no small matter, both in terms of the revenue generated by the licensed goods, themselves, and the lump sum and sales-based royalties amassed in connection with such deals. Back in 2017, for example, Italian eyewear company Safilo Group maintained licenses to make, market, and sell eyewear for a handful of LVMH Moët Hennessy Louis Vuitton-owned brands that were worth an estimated $366 million. As of 2019, when LVMH revealed that it would not renew its licensing deal with Safilo for Dior eyewear, the sales of eyewear resulting from the parties’ deal, alone, accounted for nearly 15 percent of Safilo’s $1.1 billion in annual revenue.

More recently, licensed retail sales in the U.S. and Canada reached an estimated $114 billion in 2019, according to TLL’s Annual Licensing Business Survey, with “apparel-based fashion brands seeing the greatest dollar increase among all sub-types tracked [in the survey].” TLL projected steady growth in the licensed apparel, footwear, and beauty categories for 2020 and beyond, but such projections were published in a pre-COVID world, raising the questions of where such mega-deals currently stand as a result of enduring pandemic-related impacts on the market and what can be expected in the future.

Read More at https://www.thefashionlaw.com/what-will-fashions-big-money-licensing-deals-look-like-post-covid/

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