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A licence to print money?

As competition hots up, retailers are hunting for exclusive brand licensing deals. The short-term gains are obvious, but the long-term impact on the core brand is less certain

Debenhams is thought to have splashed out about £2.5 million to buy the licence for its St George by Duffer range as part of Designers at Debenhams. And last month it launched Baker by Ted Baker, a kidswear licence it acquired earlier this year.

Similarly, House of Fraser is pursuing the licensing route, signing up Episode to replace older womenswear brand Platinum and holding talks with footwear designer Patrick Cox, which it hopes to use as Episode’s menswear equivalent.

In the footwear sector itself, Kurt Geiger confirmed it had signed a French Connection footwear licence last week, adding it to the Agent Provocateur deal it struck earlier this year. Both collections will be designed in-house and sold across Kurt Geiger’s store portfolio, but the retailer is also setting up a wholesale division to maximise licensing income.

Meanwhile, JJB’s profit warning last week was accompanied by news that the sports retailer was in talks with a number of brands to acquire their exclusive UK distribution rights, which could well come in the form of licences.

The flurry of activity in the licensing arena has been prompted by the competitive marketplace. Retailers complain of over-distribution of brands at wholesale level. “Go to Manchester and you’ll see one label in as many as 17 different retailers,” bemoans one buying director who is pursuing a licensing strategy.

“The market cannot sustain that and you have to do something to protect your business against it. With licensing, what you get is exclusivity and product control – it’s a complete point of difference to your competitors.”

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