Question

• $-Profits: Submit a recent (last 4 months) article that shows an example of a fashion industry company that is involved in licensing. Briefly summarize and analyze the article from a licensing perspective. What changes has the company implemented.? How does this company create profits using licensing? What is in it for both the licensee and licensor? Analyze the actual licensing revenue and the total sales and profits revenue streams for key data research. Discuss specific improvements for driving the business and maximize market share beyond what the article suggests. Please use fashion industry articles and examples only.

Answer 1

Licensing is the practice of contracting with another party to obtain and use rights intellectual property rights, in exchange for an agreed payment. A licensing relationship typically involves an agreement between a trademark owner and another party in which the licensor permits the licensee to use its trademark in commerce. Simply put, a license grants the licensee rights in property without transferring ownership of the property.

For example, Luxottica, the eyewear company that acquired the rights to manufacture and distribute Prada, Burberry, Tom Ford and Chanel sunglasses. Prada, Burberry, Tom Ford and Chanel still have the right to use their names in the sunglasses/eyewear category; they have just chosen to authorize Luxottica to do it for them. Without such authorization, Luxottica would not be able to manufacture eyewear using the name "Chanel," for example, without being on the receiving end of a trademark infringement lawsuit from Chanel. This is one benefit of a licensing agreement. It allows both parties to benefit without anyone's IP being violated.

Licensing is also a powerful way for a brand to grow by tapping into new geographic market and new market categories they simply are not equipped to cater to. Licensing out can helps the company to commercialize its IP or expand its current operations into new markets more effectively and with greater ease than on its own. By granting the licensee the right to market and distribute the product, the licensor can penetrate markets it could not otherwise hope to serve. The licensee may agree to make all the adaptations required for entering a foreign market, such as translation of labels and instructions; modification of goods so as to conform to local laws and regulations; and adjustments in marketing. Normally, the licensee will be fully responsible for local manufacture, localization, logistics and distribution.

It is recognized that properly done licensing offers a powerful way to grow brand awareness and build image, both for the original core products and for the expanded offerings in other segments.