Your Brand Here?
If you've attended our presentations, kept up with our insights, or worked with us directly over the past ten years, you know that Li & Fung is perennially on our "those-who-get-it" list. However, when I heard Rick Darling, President of LF USA (a division of Li & Fung), share his thoughts (below) during the Entertainment Licensing panel discussion at the Licensing Expo this month, it was all I could do not to jump up and down and scream "YESSSSS!" at the top of my lungs. After all, just two days earlier, I had presented on the State of U.S. Retail to some of these same licensors, licensees and agents who were in the panel audience. The central message guiding my session? The days of "selling" brands to retailers are over. The brands that will win in a post-rationalization world are those that position and align with each retailer's total brand vision - what we call the retailer’s "master brand." The options for fulfilling that vision have never been more abundant. But retailers increasingly believe that to be done right, it must be self-directed.
This view has fundamentally altered the ways in which various brand stakeholders (now including retailers) are optimizing and monetizing intellectual property. Licensing may be the vehicle; however, what once flowed in a single direction now moves in many - and the roles and agendas have changed as well. That's why Rick's multiple references to “intellectual property” (vs. "licensing") also got my relevance meter revving: it gets to the heart of the matter!
After over 100 years in business as a sourcing agent to retailers and brands, Li & Fung decided that bringing intellectual property on board via strategic licensing acquisitions would be another way they could bring value to retailers. (Today, they have access to about 120 properties with 40 licensors.) The strategy is working: Li & Fung was the best-performing stock this year among the 43 in Hong Kong's Hang Seng index; and last year, it ranked eighth on the leader board with a 110 percent return. Li & Fung isn't the only one making hay with brands: Iconix and even Payless (ahem, I mean "Collective Brands") have created their own variations on the theme that Cherokee (remember them?) pioneered long before. And look at how Liz Claiborne and other former manufacturing-based companies have quietly morphed into licensing-based brand houses. To whom did Liz offload the cumbersome stuff? None other than Li & Fung!
Click on our video slide show below for our take on the IP transformation and the three models we see gaining traction.
The economy may have driven a few of the changes in the branding landscape; however, even major bounce-backs are not going going to turn back the brand clock. The train HAS left the station, and regardless of who's "conducting" and who arrives at the various destinations first, the momentum for new IP models will continue. This should already be changing how you're positioning your brands, products, and services to retailers. To agents, ad agencies and solutions providers who work on both sides of the table: if you're not excited about the non-commoditized business development opportunities, I don't know what else would do the trick!
Li & Fung continues to develop its system of mutually reinforcing capabilities rather than expecting a century-old business model to answer every call. For them, its "mission critical."
How about you?