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Market Potential: Industry Trends, Company Trends, Demand Trends.

In: Business and Management

Submitted By yelox0521
Words 450
Pages 2
Market potential: industry trends, company trends, demand trends.

The brand management and licensing of trendy brands in apparel is considered a profitable business model. It has a low risk and has no overhead associated to warehouses, retail outlets, logistics, and staff. Both brand owners and competitors see what companies are doing with licensing and they do not what to feel left behind. The economic and competitive pressures have forced managements to explore new business options. The partnership between licensor, licensee and retailers has become difficult and the competition between brands has become more intense. The internet has made a tremendous impact on retailers and how they do business. Brand licensing is a business that is expanding and it has become a corporate business tool. Iconix Brand Group licenses their brands and do not manufacture products, which allows other companies to manufacture products that use its brands. “Iconix’s operating margin is over 60% and managed to grow sales at 24% compounded annual growth rate over the last five years” (A Great Investment in High Margin Apparel, 2013). Wal-Mart accounts for 17% of Iconix sales with a strong store base of over 4000 US stores; Target and Kohl’s accounts for 7% of sales. The United States is the largest market for Iconix and it accounts for 75% of sales and Japan at 10% is considered its second largest market. Iconix is hoping to drive sales over long-term with their joint ventures in international markets such as Iconix China, Iconix Latin America, Iconix Europe (A Great Investment in High Margin Apparel, 2013). Iconix makes sure that 80% of Americans know about the brand before they purchase it. They make sure that the brands they acquire have a great licensing business in place. Their brand Peanuts is their largest license and they sell insurance with Met Life and greeting cards with Hallmark.
Iconix does a lot of marketing in-house and have partnered out around the world with photographers and directors. They have over 100 people working on their marketing, public relations and social media. According to an interview with Robin Lewis, Neil Cole said “we focus on the front end of the business and let our partners focus on the back side-products, design, procurement, selling” (Q&A with Neil Cole, CEO of Iconix Brand Group, 2011)

1. Hargrave, Marshall. 2013. A Great Investment in High Margin Apparel fool.com, 2013, The Motley Fool. http://www.fool.com/investing/general/2013/10/14/a-great-investment-in-high-margin-apparel-retail.aspx 2. Lewis, Robin. 2011. Q&A with Neil Cole, CEO of Iconix Brand Group therobinreport.com 2011. The Robin Report
http://therobinreport.com/qaa-with-neil-cole-2/

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