Global Sales Up 2.4%
Global retail sales of licensed fashion goods grew 2.4% in 2014. Although it might sound like a modest increase (especially when you consider that 2013 growth was 2.5%), fashion was one of only three segments to post growth above the overall global rate of 2.0% for all sales. Only two other sectors had higher increases: entertainment/ character and sports with growth of, respectively, 4.8% and 3.4%. And we are not talking about a small sample. At $37.9 billion, fashion accounted for 23.8% of all worldwide licensed sales, most of any segment (followed by corporate trademark at 21.7%).
U.S./Canada Up 3.4%Performance was actually a bit stronger in the U.S./Canada where licensed fashion sales totaled $20.3 billion. The 3.4% increase was above the overall growth rate of 2.5% for all licensed sales in U.S./Canada, but below the 4.1% increase the fashion sector posted in 2013. The other cloud in the fashion silver lining is that most of the growth came from the U.S. side of the border; in Canada, licensed fashion sales were flat to down in 2014. Apparel Drives GrowthOn the property side, apparel grew 4.0% in the U.S./Canada, at just under $17.3 billion, roughly 85% of all licensed fashion sales. A strong surge in 2014 apparel sales came from a pair of unexpected quarters:
After three flat years in a row, the relatively small home fashion segment bounced back in 2014 with 3.5% growth ($646 million). Still, several Survey respondents and interviewees insist that this is an aberration and that the fashion designer home products trend is “played out”. The only property type that had an off year was footwear which actually declined 1% to $2.3 billion. “Athleisure and the blending of fashion and sporting goods is shifting market share—people are buying Fila rather than Fendi,” laments one fashion footwear licensor.
Product Category TrendsCore categories also showed strength on the product side. Accessories, the largest product category in fashion, grew 3.9% to $7.8 billion in U.S./Canada sales, with the biggest gains coming from:
At $6.4 billion in total sales, apparel, the second largest product category in the fashion segment, posted 5.5% growth in 2014. Other core categories fared less well, including footwear which grew only 1.1%, and health/ beauty which actually declined due in part to subpar perfume sales. “Artisanal perfumes took market share from celebrity fragrances,” said one respondent. [barChart vaxis=”{title: ”}” haxis=”{title: ‘Retail Sales in Billions’, format: ‘currency’}” title=”Retail Sales of Licensed Fashion Merchandise, By Product Category, U.S. and Canada, 2014″ legend=”{position: ‘none’}”]
Importance of Brand AuthenticityAs in previous years, many Survey respondents cited increased competition and the importance of building an “authentic” brand. “As private labels become more prevalent, customers around the world are yearning for authentic and unique brands,” says one multibrand fashion licensor. “Private label has reached the point where it has become perceived as opening price point merchandise. There’s no emotional connection with the brand.” But achieving authenticity is no small feat. “Great quality and great price are just the beginning,” notes one licensor. “You also need a well thought-out marketing message and an effective plan to communicate it.” And even that may not be enough. “Today’s consumers base buying decisions not just on price and product but on a company’s social consciousness and contribution to the community.” Competition Spurs E-CommerceWith all of these challenges, it is easy to overlook the fact that fashion licensing is growing faster than not only retail licensing in general but also GDP. But as in entertainment licensing, the wealth being created is not being shared. More fashion brands are chasing after shrinking shelf space. Retailers are becoming more conservative and prone to stick with proven brands. Consolidation is reducing the licensor pool. Thus as established labels like Tory Burch and even Jessica Simpson thrive, smaller and newer brands struggle to get their products on shelves. This trend is fueling growth of e-commerce. In 2014, 7.5% of all U.S./Canada retail sales of licensed fashion products came from e-commerce, as compared to 6.8% in 2013. Growth is coming not just from small, start-ups but established fashion houses. And as traditional retailers work to develop their websites, online-only retailers such as Amazon continue to serve as critical distribution channels for fashion-licensed goods and, irony of irony, develop their own brick-and-mortar locations. All of this is challenging traditional notions about the fashion shopping “experience” and the customer’s need to “try it on” before buying. “People are more willing to buy dresses, shoes and even luxury jewelry online,” according to one online retailer. Several respondents also noted that the “stigma” of selling fashion goods online is disappearing. “When you see Chanel start selling online you know the luxury fashion world is ready for e-commerce,” she chuckles. [pieChart title=”Retail Sales of Licensed Fashion Merchandise, By Distribution Channel, U.S. and Canada, 2014″] Want more? See detailed breakdowns and historical data for licensed merchandise based on fashion properties in the Databank. |