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Apparel

Royalty Profile for Licensed Apparel

 

Sector value, U.S. & Canada, 2017: $21.62 billion

Proportion of retail sales of licensed merchandise, U.S. & Canada, 2017: 19.8%

Average royalty, U.S. & Canada, 2018: 9.71%

Royalty range, U.S. & Canada, 2018: 5%–19%

Average royalty, U.S. & Canada, (10 years) 2009–2018: 9.47%

Analysis

In general, average royalties reported for apparel run slightly above industry-wide norms.

Variations in the category are dependent on whether products are primarily tied to entertainment (generally higher than the average), fashion or brand programs (often below the average), or other sectors.

Fashion brand royalties, in most cases, are supplemented by an additional point or two of contractually-mandated marketing spending, or contribution to a common marketing fund (CMF), as are those in some other property sectors.

The royalties assigned to apparel deals may also be affected by whether they are direct-to-retail agreements, which generate a lower royalty rate, often calculated against retail selling price or first cost rather than net wholesale.


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