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Off-price Leads the Value Segment

The share of sales lost by department stores was picked up by the lowest-priced retail tier, consisting of dollar/value/off-price stores, which saw its share of market grow 0.4 percentage points in 2015. The segment rose from 8.8% to 9.2% of all retail sales of licensed products. That translates to a 4.5% relative increase in share.

While survey respondents last year talked about entertainment properties expanding in dollar stores, more respondents this year mentioned the growth of fashion, lifestyle and entertainment brands in the off-price sector. “In fashion, there’s been a compression of retail like never before,” said one licensor. “Better brands are moving into lower markets faster than ever before, presenting huge volume opportunities.” While he questioned the sustainability of that trajectory, other executives said that brands are also beginning to court the off-price retailers (epitomized by retailers such as Ross Stores, TJ Maxx and Nordstrom Rack) with licensed products being created specifically for the expanding channel. In addition, it is becoming easier to negotiate contracts allowing a larger percentage of merchandise to flow into the off-price channel, one licensing agent related.

See the complete run-down on retail sales by distribution here, complete with a breakdown by each channel.

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