Authentic Brands Group, one of the world’s largest licensors, looks to get bigger and broaden its offerings; FAO Schwartz creates buzz for toys; NFL star Tom Brady signs on for a good night’s sleep, tennis legend Billie Jean King partners with Adidas and more.
Licensing, marketing and retail expert/opinion leader Tony Lisanti, provides insight and perspective for the top headlines of the week. “Licensing and Merchandising Report” is a must read for top execs who want objective, straightforward and authoritative analysis.
ABG Bids for Bankrupt Retail Brand
Brookstone, which filed Chapter 11 about four weeks ago, may have found a potential buyer as licensor Authentic Brands Group made a $35 million offer for the gift and gadgets retail brand.
The deal makes sense for ABG and would broaden its portfolio into various new home, electronics and gift categories versus its core apparel and accessories offerings. Also, assuming the brand still has a strong recognition among consumers, the potential is huge especially considering the success of other similar type brands such as Sharper Image and Polaroid, which have both leveraged the licensing model over the past decade to drive growth.
Furthermore, ABG cofounder’s Jamie Salter has experience with a brand like this. Salter was the executive with Hilco Consumer Capital—which acquired Polaroid and Sharper Image in 2009—that established their licensing strategies and subsequently sold off the brands. Salter left Hilco in 2010 to form ABG.
Brookstone, like Polaroid and Sharper Image, can be licensed in numerous categories and potentially hit retail sales of more than $500 million as these two brands have experienced. And, of course, ABG could possibly continue to operate retail stores, or even branded shops within other retailers.
A bankruptcy auction is scheduled for September 24.
Billie Jean King, Adidas Promote Girls in Sports
As the opening rounds of the U.S. Open take center court in Forest Hills, tennis legend Billie Jean King and Adidas kicked off a campaign to help female athletes stay in sports.
Eva Barrett, global senior director of marketing for adidas specialist sports said, “At adidas, we believe through sport, we have the power to change lives. That’s why we are proud to partner with Billie Jean King on Here To Create Change, which asks the people of New York and around the world to help us find solutions to the problems faced by young girls in sport.”
To mark the campaign, adidas is releasing a Billie Jean King Speedfactory shoe AM4BJK, which features the blue Adidas suedes she played in during her match 45 years ago. According to Adidas, 300 pairs will be available at the brand’s U.S. Open store and select stores in NYC.
“The U.S. Open, and the global audience the event delivers, is the perfect stage for this program and showcases adidas’ commitment to equality and positive change,” Billie Jean King said. “I am proud to collaborate with adidas on addressing today’s barriers. Together, we can achieve more progress, equality and access for everyone in tennis and beyond.”
Tom Brady Supports a Good Night’s Sleep
New England Patriots quarterback Tom Brady signed on as a brand ambassador for the new online mattress retailer, Molecule, which launched in January.
Molecule, one of the newest entrants in the booming new mattress segment, competes at a much lower price point of about $1,500 for a Queen size versus more than $3,000 for many of its competitors.
In addition to Brady, other Molecule sports ambassadors include Seattle Seahawks quarterback Russell Wilson, gymnast Nastia Liukin, rower Susan Francia and husband-and-wife distance runners Ryan and Sara Hall. Molecule also has a partnership with the New York Mets.
Brady and Wilson also hold an equity stake in the company.
Starbucks and Nestle Close Deal
In what can be called one of the largest licensing deals ever, Nestle and Starbucks announced the closing of their new partnership this week.
The $7.1 deal gives Nestle perpetual rights to market Starbucks consumer packaged goods and foodservice products globally, excluding the company’s retail shops.
The licensing partnership, which is a huge growth opportunity for both companies, covers Starbucks packaged coffee and tea brands including Starbucks, Seattle’s Best Coffee, Teavana, Starbucks VIA Instant, Torrefazione Italia coffee and Starbucks-branded K-Cup pods. It excludes ready-to-drink products and all sales of any products within a Starbucks store.
“This partnership demonstrates our growth agenda in action, giving Nestlé an unparalleled position in the coffee business with a full suite of innovative brands,” said Mark Schneider, Nestlé CEO. “The outstanding collaboration between the two teams resulted in a swift completion of this agreement, which will pave the way to capture further growth opportunities.”
Said Kevin Johnson, president and CEO of Starbucks: “Bringing together the world’s leading coffee retailer, the world’s largest food and beverage company, and the world’s largest and fast-growing installed base of at-home and single-serve coffee machines helps us amplify the Starbucks brand around the world while delivering long-term value creation for our shareholders.”
Approximately 500 Starbucks employees in the United States and Europe will join the Nestlé family, with the majority based in Seattle and London. The international expansion of the business will be led from Nestlé’s global headquarters in Vevey, Switzerland.
FAO Schwartz Gets Ready to Rock
With the liquidation of Toys“R”Us still fresh in the minds of many licensing execs, the news of the iconic brand FAO Schwartz opening a flagship store certainly garnered a lot of publicity and brought a ray of optimism and excitement to the toy sector.
The 20,000 sq. ft store in New York’s Rockefeller Center, which was first announced last February, will open in November, almost three years after it closed its flagship store.
It’s important that the new store will showcase many toy brands and licensed brands to an international audience in one of the busiest pedestrian areas in New York. However, its only one store, so its impact on toy retailing will be minimal for now but could grow over the next few years if the company continues to expand.
ThreeSixty Group, which acquired the retail brand from Toys“R”Us in October 2016, has additional plans to expand with a store in LaGuardia airport later this year as well as a store in China in 2019.
The store will closely resemble the original FAO Schwartz and will focus on engaging consumer experiences with various demos and events.
Quote of the Week
“I encourage my teams to fail fast, balance patience and urgency and to challenge the status quo but respect the brand’s legacy. Our job is to leave these brands better than we found them.” —Richard Dickson, Mattel, via Forbes
Stats of the Week
- Consumer confidence rose in August to its highest level since October 2000, according to The Conference Board. The index climbed to 133.4 in August rising slightly from July’s 127.4. The Conference Board reported that consumers had better feelings toward the economy in the near term but less optimism about long-term growth.
- Consumer spending on video gaming in the U.S. reached $19.5 billion in the first half of 2018 through June, an increase of 40% compared to the same time period last year, according toThe NPD Group.