Pokemon battles to boost licensing
Pikachu, Charmander and Squirtle are in training to take over children’s licensed apparel when Pokemon clothing hits mass retail shelves beginning in April.
In general, retailers are scaling back licensed children’s wear as so called “evergreen” properties start to turn deciduous and “blockbuster” concepts related to theatrical releases perform below expectations. Currently. licensed goods represent about 10 percent of children’s wear sales. During peaks, as much as 30 percent of kids’ volume was generated by licensed clothing.
Inventory problems created by an excess of last year’s Star Wars merchandise, which didn’t live up to sales expectations–to say the least, certainly haven’t helped the licensing cause. And with the vast number of licensed choices in the marketplace, selecting the next Ninja Turtle or Lion King is increasingly difficult. But Pokemon is clearly moving countertrend.
“Although Star Wars was awful and we’re stepping back in most licensing, we are excited about Pokemon,” says Cindy Quinn, divisional merchandise manager for children’s wear at Bradlees in Braintree, Mass., who will feature the goods on her selling floors late in the spring season.
While Skip Chustz, the senior vice president in charge of apparel at ShopKo, is also feeling skittish about most licensed goods, he, too, makes an exception in his planning when it comes to Pokemon. “Pokemon is it! Anything Pokemon will sell,” he says.
The Big Three mass merchants–Wal-Mart, Kmart and Target–are also committed to the characters, which are owned by Nintendo and use 4Kids Entertainment as a licensing agent. “Every chain is taking Pokemon, and they’ll create Pokemon shops,” says Sam Haddad, executive vice president of Haddad Apparel Group, the Pokemon licensee for children’s outerwear.
Boys T-shirts are expected to be the, first apparel items to hit mass doors, starting in April. This will be followed in July with “tween” girl fashions, boy’s tops and bottoms, pajamas, headwear, accessories and footwear. Stores will also be filled with other Pokemon times–ranging from health and beauty aids to eyewear–to help retailers make Pokemon statements. Mid-tier retailers and toy stores already had a taste of success with Pokemon apparel last year. Among the products available at such retailers as Toys “R” Us and Sears were T-shirts and underwear. Even Bloomingdale’s had success, with Pokemon merchandise such as accessories and watches. According to 4Kids executives, licensed Pokemon apparel at Kids “R” Us last year hit record highs. And Sears reported strong sell-throughs in its Pokemon Poke-Marts-boutiques with Pokemon merchandise.
Discounters whet their Pokemon appetites toward the end of ’99 when accessories became available to the tier. Sandy Sansavera, senior vice president and general merchandise manager for the Rocky Hill, Conn.-based Ames, praised last year’s sell-through on watches at his chain.
The one downside, however, was that girls’ accessories lagged behind boys. Although Pokemon is billed as appealing to both genders, Sansavera called girls’ accessory sales “disappointing.”
Even with Pokemon’s current success, retailers are already trying to gauge the property’s longevity. And that’s no mean feat for a merchandising executive. “Your average three-year-old knows better what will happen with licensed characters than anyone else,” says Chustz.
While Pokemon is certainly the most successful licensing effort based on Japanese animation, it isn’t the only game in town. Digimon, a derivative of Pokemon that also has its own TV show, is only the first of what experts expect to be a flood of knocks off. Digimon products were available at mass before Pokemon. “That was their plan–to be first at mass,” observes Sansavera, who is among those experimenting with Digimon. He says it is still too early to judge its success. Target also offers Digimon in the form of T-shirts.
Another promising apparel property with its roots in “anime” is Powerpuff Girls, a licensing program based on the successful Warner Bros. TV show airing on Cartoon Network. Retailers, including Sansavara at Ames, have been impressed with early movement of Powerpuff merchandise, which hit mass market shelves in limited quantities during the second half of last year.
“It has been exceptional out of the gate. It is hip and fashion right. Powerpuff is only just hitting its stride,” says Karen Weiss, senior vice president apparel licensing and stores for Warner Bros. Consumer Products. August 2000 will include a major on-air promotion on Cartoon Network titled Power UP for Back-to-School highlighting Powerpuff Girls merchandise.
Beyond Japanese animation, there are a handful of other licensed efforts to which mass merchants are receptive. These include Nickelodeon’s Blues Clues, which debuted at Sears last year, as well as Looney Tunes, Barbie and professional wrestling.
“I think the infant and toddler program for Blues Clues will be good,” predicts Ames’ Sansavera.
“Blues Clues is the one other property (aside from Pokemon) we’re excited about,” adds Bradlees’ Quinn. “And I think extending into an infants program was good.”
“It is our belief that Blues Clues is here to stay,” says Gail Stern, vice president of soft goods for Nickelodeon, who bases her opinion on the success the license experienced at Sears.
Kmart is also hoping Steve and Blue, stars of Blues Clues, will deliver big sales for the chain. This spring Kmart is putting together a Blues Clues shop in one department with both boys and girls merchandise. The centerpiece of the boutique will be a closet organizer used to display a range of licensed product.
Retailers still haven’t counted out the sports licenses either. Quinn at Bradlees says wrestling and Major League Baseball sell on a year-round basis. “They aren’t as risky because it isn’t like a movie release.”
Meanwhile, Kmart continues to enjoy success with Nascar programs. It helps sponsor events, features clothing with drivers and cars, and will continue to build special displays in its stores built around upcoming Nascar events.
Sansavera at Ames says his chain is also hoping to boost sports licensed sales with more faceouts in the department to tout the goods.
Fashion merchandise remains key in the minds of merchandisers when it comes to this years’ children’s wear sales. “Kids are getting older younger,” says Charles Becker, director of marketing and licensing for the Millennium Apparel Group Inc. in New York, which is an outerwear licensee for Powerpuff. “Clearly, you have to have the right styles.”
New interpretations of Barbie have helped sales, according to Sansavera. “There are very trendy items associated with Barbie,” he says.
Nickelodeon is trying to combine the popularity of sports with fashion acuity in its revamped Rugrats line, which after strong initial sales fell off the radar screen. “After the Rugrats movie, we decided to take a hard look at the line and reinvent the license in 2000,” says Stern.
For spring, Nickelodeon will partner with Major League Baseball in a co-branded baseball program featuring Rugrats characters in baseball garb. There will also be another Rugrats movie for Thanksgiving 2000.
Manufacturers are hopeful that fashionable styles will prompt sales. At Happy Kids’, which holds the license for jeans and fleece separates, Mark J. Benun says Rugrats is showing a strong resurgence. “The products are fashionable and in the right fabrics,” he says. Chustz at ShopKo says Rugrats with an updated look should bring back customers.
Despite the overriding caution retailers are exhibiting in the licensing arena, more new names are being tapped, including those based on the books of Dr. Seuss.
Although an old name, retailers are enthused about the licensing of Dr. Seuss. “Because it hasn’t been available and has interest from parents and kids, it looks promising,” according to an East Coast retailer.
The children’s licensing business is more complicated than ever, and while store assortments won’t be as dominated by characters as in the recent past, the business is still vital. Pokemon and other properties continue to titilate youngsters’ imaginations and stimulate respectable retail sales.
COPYRIGHT 2000 Lebhar-Friedman, Inc.
COPYRIGHT 2000 Gale Group