Retail sales of licensed goods in the U.S. and Canada grew a robust 3.4% in 2015, according to The Licensing Letter’s Annual Licensing Business Survey. At just under $103.3 billion, total sales surpassed the $100 billion mark for only the second time.
2015 is the fifth up year in a row for the U.S./Canada licensing business. This year’s 3.4% increase not only exceeded the 2.5% growth of 2014, but overall performance of the North American economy—in 2015, U.S. GDP grew 2.4% and Canadian GDP grew 1.2%.
Note: Numbers may not add up exactly due to rounding. | ||||
(Figures in Millions) | ||||
---|---|---|---|---|
Property Type | Retail Sales, 2015 | Retail Sales, 2014 | Change, 2014-2015 | Share of Market, 2015 |
Art | $5,665 | $5,548 | 2.1% | 5.5% |
Art and Artists | $4,226 | $4,147 | 1.9% | 4.1% |
Museums | $1,438 | $1,401 | 2.7% | 1.4% |
Celebrities | $5,682 | $5,541 | 2.5% | 5.5% |
Entertainers/Models | $2,585 | $2,540 | 1.8% | 2.5% |
Chefs/Home-Related | $2,126 | $2,103 | 1.1% | 2.1% |
Digital/Other | $971 | $899 | 8.0% | 0.9% |
Collegiate | $3,422 | $3,345 | 2.3% | 3.3% |
Entertainment | $11,878 | $10,998 | 8.0% | 11.5% |
Estates | $2,271 | $2,251 | 0.9% | 2.2% |
Fashion | $20,942 | $20,316 | 3.1% | 20.3% |
Apparel | $17,795 | $17,277 | 3.0% | 17.2% |
Footwear | $2,480 | $2,393 | 3.6% | 2.4% |
Home | $668 | $646 | 3.4% | 0.6% |
Music | $2,450 | $2,492 | -1.7% | 2.4% |
Non-profit | $1,251 | $1,258 | -0.5% | 1.2% |
Publishing | $4,505 | $4,460 | 1.0% | 4.4% |
Books | $487 | $500 | -2.5% | 0.5% |
Newspapers/Magazines | $2,763 | $2,714 | 1.8% | 2.7% |
Comic Books/Strips | $1,255 | $1,247 | 0.7% | 1.2% |
Sports | $14,786 | $14,109 | 4.8% | 14.3% |
Trademarks/Brands | $27,645 | $26,850 | 3.0% | 26.8% |
Automotive/Motor Vehicle | $4,139 | $4,018 | 3.0% | 4.0% |
Food/Beverage | $7,595 | $7,268 | 4.5% | 7.4% |
Restaurants | $4,625 | $4,557 | 1.5% | 4.5% |
Sporting Goods | $1,324 | $1,317 | 0.5% | 1.3% |
Hardware, Appliance and Tool | $2,820 | $2,722 | 3.6% | 2.7% |
Home-related | $387 | $378 | 2.4% | 0.4% |
Electronics/Technology | $3,234 | $3,125 | 3.5% | 3.1% |
Electronic Media | $221 | $216 | 2.0% | 0.2% |
Other | $3,301 | $3,249 | 1.6% | 3.2% |
Traditional Toys/Games | $1,384 | $1,350 | 2.5% | 1.3% |
Video games/Interactive/Online | $586 | $574 | 2.0% | 0.6% |
Other | $809 | $773 | 4.6% | 0.8% |
TOTAL | $103,276 | $99,865 | 3.4% | 100.0% |
[pieChart title=”Retail Sales of Licensed Merchandise, by Property Type, U.S./Canada, 2015″]
[‘Property Type’, ‘Share of Market, 2015’],
[‘Trademarks/Brands’, {v: 27645, f: ‘$27,645’} ],
[‘Fashion’, {v: 20942, f: ‘$20,942’} ],
[‘Sports’, {v: 14786, f: ‘$14,786’} ],
[‘Entertainment’, {v: 11878, f: ‘$11,878’} ],
[‘Celebrities’, {v: 5682, f: ‘$5,682’} ],
[‘Art’, {v: 5665, f: ‘$5,665’} ],
[‘Publishing’, {v: 4505, f: ‘$4,505’} ],
[‘Collegiate’, {v: 3422, f: ‘$3,422’} ],
[‘Music’, {v: 2450, f: ‘$2,450’} ],
[‘Estates’, {v: 2271, f: ‘$2,271’} ],
[‘Traditional Toys/Games’, {v: 1384, f: ‘$1,384’} ],
[‘Non-profit’, {v: 1251, f: ‘$1,251’} ],
[‘Video games/Interactive/Online’, {v: 586, f: ‘$586’} ],
[‘Other’, {v: 809, f: ‘$809’} ]
[/pieChart]
Toys/Games, Food/Beverage & Apparel Lead Growth on Products Side
For the second straight year, toys/games was the fastest growing product category, posting an 8.1% increase. Growth in toys has mirrored (and fed off of) the success of the entertainment/character property type over the past three years.
Year | Entertainment/Character | Toys/Games |
---|---|---|
2013 | 3.6% | 3.2% |
2014 | 6.0% | 7.0% |
2015 | 8.0% | 8.1% |
As in 2013 and 2014, connection to “A-list” entertainment properties like Frozen, Star Wars and Minions drove growth in the toy industry. According to NPD Group, while overall toy sales for the year were up 6.7%, movie-licensed toys, led by Star Wars, significantly outperformed the overall market with 9.4% growth. And it wasn’t just movies. Impetus for growth came from entertainment/character properties in other media including TV (Paw Patrol), video games/software (Minecraft) and YouTube (Shopkins).
Food/beverage product sales increased for the sixth year in a row. The 6.7% gain was the second highest of any product category, and even better than 2014’s 6.0% growth rate. The category is unusual in that retail opportunities are expanding rather than contracting, with distribution channels like gas stations and drug stores eager to expand their food and beverage offerings. And as one agent put it, “once brands are in the aisle, they don’t leave.”
Apparel sales rose 6.6% largely on the strength of sports- and fashion-based properties. The former influenced not just jerseys, the traditional cash cow, but also off-field apparel. As has become customary, the women’s segment grew the fastest. “Women’s pro sports apparel is no longer a sideshow,” explains a licensor. In addition to stalwarts like G-III’s Touch by Alyssa Milano, the leagues are enlisting well known women’s fashion labels like Victoria’s Secret and Dooney & Bourke. Fashion labels also spurred growth in apparel sales, especially active wear. The hot fashion trend in 2015, athleisure, was tailor-made for licensing, as exemplified by StellaSport, the collaboration between Stella McCartney and Adidas on a line of low-price fashionable athletic apparel for young women that debuted in January.
Accessories, the second largest product category behind apparel, grew a sluggish 1.8%. Licensed handbag sales actually declined (-1%). And if it were not for wearable technology like Apple Watch Hermès, jewelry and watches would have fallen too. “It was another bad year for fine jewelry,” laments one consultant. The silver lining was eyewear, the largest accessory subcategory ($4.7 billion), which grew 3.6%. The other accessory product categories were flat or down, including hosiery (2.5%), headwear (2.4%), luggage (1.7%) and scarves/ties (-1.6%).
Performance of Other Product Categories
Five other product categories met or exceeded the lofty 3.4% industry-wide growth total:
- Sporting goods grew 3.8%.
- Footwear increased 3.7%. It was a good year for both athletic and fashion licensed footwear. “The casual workplace and demand for comfort without compromising looks is making footwear a key wardrobe element,” explains one fashion licensor. The numbers would have been even better but for the warm weather in the fourth quarter that suppressed sales of boots and other winter footwear.
- Consumer electronics was up 3.5%, after posting a 3.0% gain in 2014. The category includes smart watches, which are dominated by fashion brands in the high-end market and entertainment/media brands in the low-end. And electronics companies are increasingly shifting their revenue model to rely on royalties rather than manufacturing product in-house.
- Publishing products kept up steady growth at 3.4% with activity from new licenses, particularly from digital celebrities and entertainment/media, keeping the category kicking.
- The relatively tiny pet products category ($421 million) grew 4.8% after falling 2% in 2014. Demand for premium pet products and services, including toys and other products licensed from fashion, entertainment and celebrity properties, has grown as pet parents seek to share their favorite brands with their pets. And while large chains have dominated A-list licenses (think Star Wars for Petco and Martha Stewart for PetSmart) for exclusive deals, there was a lot of opportunity for smaller brands.
The various home-related product categories posted more modest gains, including (in order of market size):
- Domestics ($3.4 billion) grew 2.1%;
- Furniture/home furnishings ($3.1 billion) increased 2.5%;
- Housewares ($2.8 billion) was up 1.5%;
- Hardware & paint ($322 million) rose 3%; and
- Gardening ($226 million) grew 2%.
Meanwhile, product categories in long-term decline continued their freefall in 2015, including gifts/novelties which had its fifth down year in a row. The 4% decrease was the biggest of any product categories. “Low consumer confidence and the decline of foot traffic in shopping malls are killing the gifts sector,” explains a retailer. “People are still buying on impulse, they’re just doing it online,” a consultant suggests.
Stationery/paper continued to struggle (-3.2%). Technology has dealt the paper industry a dual blow by rendering its product and distribution channel all but obsolescent. A veteran licensing agent sums it up glumly: “People don’t need paper cards anymore; and they don’t need stationery stores to get the paper goods they do need.”
There was, however, one product category that managed to arrest its downward spiral. After four years of steep decline, including last year’s 8% loss, video games/software bounced back by posting a 2.5% increase, amid strong demand for games for eighth generation consoles such as Sony’s PlayStation 4, Microsoft’s Xbox One and Nintendo’s Wii U and a growing market for mobile games.
Note: Numbers may not add up exactly due to rounding. | ||||
(Figures in Millions) | ||||
---|---|---|---|---|
Product Category | Retail Sales, 2015 | Retail Sales, 2014 | Change, 2014-2015 | Share of Market, 2015 |
Accessories | $14,913 | $14,656 | 1.8% | 14.4% |
Eyewear | $4,748 | $4,583 | 3.6% | 4.6% |
Handbags, Backpacks, Messenger Bags | $2,050 | $2,071 | -1.0% | 2.0% |
Headwear | $1,378 | $1,345 | 2.4% | 1.3% |
Hosiery | $578 | $564 | 2.5% | 0.6% |
Jewelry and Watches | $3,494 | $3,459 | 1.0% | 3.4% |
Luggage and Travel Accessories | $1,447 | $1,423 | 1.7% | 1.4% |
Scarves and Ties | $154 | $156 | -1.6% | 0.1% |
Other | $1,066 | $1,055 | 1.0% | 1.0% |
Apparel | $19,626 | $18,411 | 6.6% | 19.0% |
Consumer Electronics | $5,415 | $5,232 | 3.5% | 5.2% |
Domestics | $3,480 | $3,409 | 2.1% | 3.4% |
Food/Beverages | $10,783 | $10,106 | 6.7% | 10.4% |
Footwear | $5,672 | $5,469 | 3.7% | 5.5% |
Furniture/Home Furnishings | $3,111 | $3,035 | 2.5% | 3.0% |
Gifts/Novelties | $2,692 | $2,804 | -4.0% | 2.6% |
HBA | $7,767 | $7,756 | 0.1% | 7.5% |
Fragrance | $4,002 | $4,051 | -1.2% | 3.9% |
Hair Accessories | $264 | $267 | -1.0% | 0.3% |
Cosmetics/Nail Polish/Other | $3,500 | $3,438 | 1.8% | 3.4% |
Housewares | $2,869 | $2,827 | 1.5% | 2.8% |
Infant Products | $2,703 | $2,690 | 0.5% | 2.6% |
Publishing | $3,648 | $3,528 | 3.4% | 3.5% |
Sporting Goods | $2,826 | $2,723 | 3.8% | 2.7% |
Stationery/Paper | $2,446 | $2,526 | -3.2% | 2.4% |
Toys/Games | $7,530 | $6,965 | 8.1% | 7.3% |
Video games/Software | $3,003 | $2,930 | 2.5% | 2.9% |
Other | $4,792 | $4,798 | -0.1% | 4.6% |
Hardware and Paint | $322 | $313 | 3.0% | 0.3% |
Gardening | $226 | $221 | 2.0% | 0.2% |
Pet Products | $421 | $402 | 4.8% | 0.4% |
Funerary | $9 | $9 | 1.0% | 0.0% |
Automative Accessories | $384 | $372 | 3.2% | 0.4% |
Boats and Vehicles | $521 | $519 | 0.5% | 0.5% |
Other | $2,909 | $2,962 | -1.8% | 2.8% |
TOTAL | $103,276 | $99,865 | 3.4% | 100.0% |
[pieChart title=”Retail Sales of Licensed Merchandise, by Product Category, U.S./Canada, 2015″]
[‘Product Category’, ‘Retail Sales, 2015’],
[‘Apparel’, {v: 19626.4523917176, f: ‘$19,626’} ],
[‘Accessories’, {v: 14913.3349523304, f: ‘$14,913’} ],
[‘Food/Beverages’, {v: 10782.7343346338, f: ‘$10,782’} ],
[‘HBA’, {v: 7766.727809191, f: ‘$7,766.73’} ],
[‘Toys/Games’, {v: 7529.5641501696, f: ‘$7,529’} ],
[‘Footwear’, {v: 5671.6645662352, f: ‘$5,671’} ],
[‘Consumer Electronics’, {v: 5414.800941378, f: ‘$5,414’} ],
[‘Publishing’, {v: 3648.3677854624, f: ‘$3,648’} ],
[‘Domestics’, {v: 3480.3984693522, f: ‘$3,480’} ],
[‘Furniture/Home Furnishings’, {v: 3111.2259928, f: ‘$3,111’} ],
[‘Video games/Software’, {v: 3002.7783975, f: ‘$3,002’} ],
[‘Housewares’, {v: 2869.270787565, f: ‘$2,869’} ],
[‘Sporting Goods’, {v: 2826.021538395, f: ‘$2,826’} ],
[‘Infant Products’, {v: 2703.2882958015, f: ‘$2,703’} ],
[‘Gifts/Novelties’, {v: 2691.91962, f: ‘$2,691’} ],
[‘Stationery/Paper’, {v: 2445.620692944, f: ‘$2,445’} ],
[‘Other’, {v: 4792.0471145466, f: ‘$4,792’} ]
[/pieChart]
Tempered Optimism for 2016
Survey respondents reporting that their U.S./Canada licensing business grew in 2015 outnumbered those reporting declines nearly 3 to 1. When you add the “flats” to the “down” total, the ratio was 2 to 1 in favor of positive growth.
However, while 2015 seems to have been a good year for most, Survey respondents weren’t as optimistic as usual about the future. Only 56% said they thought that their business would grow in 2016, as opposed to 75% who predicted growth from last year. But among the optimists, nearly 66% predicted that growth would exceed 10%. Among the pessimists, 66% said they expected sales to be flat next year; the rest said they thought 2016 would be a down year.
Survey Methodology
TLL’s estimate of the size of the licensing business is based on its online survey of global licensing executives, conducted in January 2016; third-party research of overall category and industry size; dozens of in-depth interviews with licensing executives, both for the survey and throughout the year; annual reports and other corporate information from retailers, licensors and licensees; and news articles from trade publications covering trends in the respective product categories and property types affected by licensing.
Experts interviewed included licensors, manufacturers, agents and retailers, as well as consultants, allied professionals and individuals with multiple roles. They were based in all territories around the globe; but for this portion of the survey which focuses only on the U.S. and Canada, results are based only on responses of those doing business in those territories.
More results from TLL’s Annual Licensing Business Survey will be forthcoming in future issues, including trends in royalty rates and payment structures, distribution trends and product category results by key property types for U.S. and Canada, as well as coverage of the size of the global licensing business and trends in territories outside the U.S. and Canada.