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Successful licensing is all about teamwork

Richard Kottler

Clothing labels want to maximise their brand’s potential but protect its DNA and integrity

One of the key trends in footwear that will continue into this decade is clothing firms licensing their brands to footwear companies. While potentially very lucrative, this is a venture that should not be entered into lightly.

If a brand has a real personality and point of difference, a footwear range to complement it makes good business sense. The opportunity is valid across all categories, although clothing companies often don’t realise that the design and development process for footwear involves more engineering and the lead times are very different.

Some of the shrewdest operators offer the following advice: footwear companies must understand the clothing brand’s DNA, history and culture before designing anything, so working with the clothing designers is essential. Also, both parties should agree distribution channels and pricing in advance.

The contract is crucial. It is essential that both parties review this very carefully. For the licence holder, minimum guarantees are potentially a huge pitfall if sales fail to reach expectations.

Clothing labels want to maximise their brand’s potential but are careful about protecting its DNA and integrity. The licensor will want full control over the range content, market positioning and sales channels. The licensee, on the other hand, will want to ensure the brand owner can deliver on the marketing and other support and will want to be confident that it can cover the minimum royalties agreed and still turn a profit.

In the end, it’s all about partnership. You need a partner that is reliable financially as well as a business you can work with. Both licensor and licensee should support each other and ensure the vision for the brand is aligned. If this can be achieved, both parties will benefit.

Richard Kottler is chief executive of trade body the British Footwear Association

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