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LICENSING BEST-PRACTICES OF INDEPENDENT LUXURY BRANDS
The world market for brands and licenses is constantly growing and represents a very interesting economic field. Brands are constantly being sold, and brand ownership may change often completely unbeknown to the majority of consumers. Brands are in fact held as any other assets, either by individuals or by companies, as part of their balance sheet (Lucky & Giliberti, 2013).
A multiple case study of independent luxury companies enables us to identify the following best practices:
1) Perfume = Survival
Most brands achieve a long lasting market penetration once they successfully move into the fragrancies. Every case study confirms the assumption.
2) Perfume + cosmetics = survival and success
It seems that the perfume business and cosmetics in general are the main boosters for a brand to keep on growing and gain if not “top of mind” at least “aided awareness”.
3) Less licensees = more business!
As strange as this can be, most luxury brands that have succeeded in keeping a remarkable growth have made the decision not to expand their number of licensees, but rather to dramatically diminish them, selecting, in most of the cases, main licensing categories like:
1- Perfumes and cosmetics
2- Watches
3- Eye glasses
4- Limited ranges of accessories
The cases show that massive licensing may have brought very interesting revenues obtained “the easy way” by the brands owners, but have then started a decline in revenues due to many practical reasons:
The brand loses its appeal by becoming seen just about everywhere and applied to any type of possible product. The brand simply becomes less exclusive and therefore less luxury.
Cases like Saint Laurent (new name used instead of Yves Saint Laurent) in France or Valentino in Italy, clearly indicate that the brands managers have decided to concentrate their core business within a very limited number of licensees making sure that the brand orientation strictly reflects the identity chosen by the (new) owners. The most impressive example of extremely massive licensing tending to pull the brand out of the luxury market is without doubt the one of Pierre Cardin.
