Licensing of Clothing Brands

Licensing agreements lease the right to use legally a protected brand name and its relevant logo and graphic to apply on a product, a service, or a promotion. The licensor owns the mark, and the licensee can be a manufacturer, supplier, or distributor who acts on behalf of the licensor and whose production output is increased by the perceived value of a well-known brand. In the fashion industry, licensing issues mainly concern a partnership between a brand with high reputation (often international) and a local or international manufacturer, who often holds an agreement to distribute.

Licensing can be studied through various disciplines concerning management, law, international commerce, and globalization. It concerns intellectual property rights, export techniques and international distribution, marketing and branding, product development and extension.

In terms of management, licensing is a powerful means to grow a company, though in a different way as a licensor or as a licensee. A licensor bears less financial risk compared to a licensee who invests in production, distribution, communication, and often design and creation. It is a means to reach new customer targets and geographical zones and expand business rapidly and efficiently.

In terms of market positioning, licensing agreements on clothing brands have a wide scope and are used by all kinds of companies. Brands can range from high fashion (with a remarkable aesthetic sense and image, such as haute couture), to middle- and lower-priced character goods (cartoon figures, movies), with relatively low design input.

In terms of products, clothing brands used to develop “textile made” items (ready to wear for women, men and children's wear, lingerie and underwear, knitwear, sportswear, nightwear, etc.) are increasingly expanded into new markets such as cosmetics and perfumes, leather goods, interior goods and home furnishings (e.g., Ralph Lauren Home collection), jewelry, and more recently high tech (e.g., Dior mobile phone).