Sunday, August 16, 2009

Fashion Licensing

Fashion Licensing is when a designer allows a manufacturer to make a product using their name for a percentage of the profits, usually 3 to 8 percent. Licensing allows a designer to get their name out there, on everything from handbags, jewelry, perfume, sheets, appliances, and sometimes even other clothing. Licensing enables a designer to reach out to a broader category of clients through affordability. Without it most people would never be able to own a product bearing a name like Yves Saint Laurent or Christian Dior, but through licensing everyone can have YSL perfume and a Dior umbrella.

One of the first designers to license their name was the great couturier Christian Dior. In 1948 he signed an agreement with the American hosiery manufacturer, Prestige, to produce Christian Dior nylon stockings. These were then sold at affordable prices in American department stores. Originally Prestige offered Monsieur Dior a flat payment of $10,000.00 dollars which he immediately refused. He instead opted for a percentage of their profits which would become the standard for any designer who was going to license their name. After Christian Dior’s death the house continued to license their name and by the mid 1980’s there were over two hundred Dior licenses. Often the royalties from these made more money than the actual clothing produced by the house. With the Asian markets starting to open to western business it became even easier to license and then very cheaply manufacture goods. These goods manufactured in Asia were very cheap and could hurt a company’s image. Once in the mid 80’s, the House of Dior’s head designer for more that 30 years, Marc Bohan, was browsing Bloomingdales in New York and was disgusted to find the Dior name plastered on everything from polyester scarves to plastic luggage. While the house could take pride in its licensed perfumes like Diorissimo and Eau Sauvage, its licensed goods quality often suffered greatly, and the brand would not be the same until it weeded out bad licenses and became a true luxury house once again in the early 90’s.

The great question in high fashion licensing is, is it worth it to stake your name on a product you don’t make? You could make tons of money licensing, or you could make less and stick to quality. In the past, once entered into a licensing agreement, the designer sat back and watched the money pile up instead of checking quality. They wanted to increase sales so they had to increase production and cut corners to keep it inexpensive. For example, handbags would be trimmed in vinyl instead of leather so they could retail at a lower price and therefore sell more. Often licensees were told by the great houses never to sell their product to discounters like Loehmanns, but happy with their royalties they turned a blind eye and licensees would ship to any store they pleased. By the late 1980’s many of the old prestigious fashion houses had a bad image for lack of quality control on licensed goods.

The man responsible for “big business” in licensing is Pierre Cardin, the great couturier and business man. He holds the record for having the most licenses and is the wealthiest French fashion designer with an estimated fortune of over $2.5 billion dollars. After quickly establishing his own couture house in 1950 he would go almost unnoticed until the 60’s when he would become one of the biggest names in fashion. By the late 1980’s Cardin had accumulated more than 800 licenses on everything including apparel, cosmetics, fragrances, food, linens, furniture, and appliances. Almost every manufacturer was happy to put the Pierre Cardin logo on anything. He went so mad with licensing that he was even taken to court for giving the rights to Pierre Cardin lighters to two different companies. His name became so diluted that fragrances and clothing lines bearing his label were being sold at low end department stores like J.C. Penny’s and at high end stores like Saks Fifth Avenue. Who wants a Pierre Cardin coat for $500 dollars when you can get it for $100? It was simply outrageous but it made him very wealthy and successful. Cardin was still going strong in the late 1990’s. He had weathered the storm unlike any other house. In the mid 90’s when other houses were hurting he was quoted as saying, “I don’t understand what they are doing(the other fashion houses), they’re not selling caviar; they’re selling t-shirts, jeans, and underwear. It makes no sense!!! Anyway, I already did all that.” Somehow Cardin had found success through licensing, it hurt his image a little but it made him very rich.

While Pierre Cardin was putting his name on everything, the reigning king of fashion, Yves Saint Laurent was a little more skeptical. For more that 20 years Yves Saint Laurent was the end all and be all of French and world fashion. He was the greatest couturier in the world and every woman wanted to wear Saint Laurent. But even Yves Saint Laurent couldn’t resist the money you could make licensing. YSL’s first license oddly enough was for cigarettes. But Yves stood for quality and nothing ever hurt his image as the world’s preeminent fashion designer. He was able to hold his place due to his success in the licensing and marketing of YSL perfume. In 1978, Yves launched Opium, one of the biggest selling fragrances of all time. Although the product was licensed, Saint Laurent was a huge part of its development and marketing. Opium was a spicy oriental fragrance perfectly suited to the Saint Laurent woman, mysterious and sexy. Opium’s launch party in the US was held on a Chinese junk in New York’s East River with fire works and a slew of international celebrities in attendance. It was the first time a star studded party was given to expose a product to the public, and it was a huge success. Opium’s sales alone reached more than $100 million dollars a year at the height of its popularity. Yves Saint Laurent proved you could keep your prestigious image and make a killing. In a way the success of Opium was the end of fashion as art. The houses didn’t have to worry about clothing sales, they always had licensed perfumes waiting in the wings to help them on.
Today fashion licensing is standard practice. In the beginning when the grand couture houses became greedy, licensing hurt fashion and many an important house was hit. But they quickly learned their lesson and they fought very hard to restore their image. Without licensing houses like Dior and Saint Laurent wouldn’t be household names and only the very wealthy would know the genius that were those names. In my opinion through licensing, the great houses only helped to insure their importance by letting the masses glimpse true glamour.

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