License to Brand

Costco signs deal with Iconix to sell Charisma line

I was very interested to read this morning about the deal that Costo has struck with Iconix to sell the Charisma line.  The Charisma line is bridal-focused, offering 100% Egyptian cotton fashion bedding, sheets, blankets and towels.

 

Costco has done such an amazing job with the Kirkland brand, really establishing it as standing for “trusted quality and value” - whether it be clothes or diapers.  So the fact that they still see the value of licensing a brand really shows what astute brand strategist the folks at Costco are. The Charisma brand is “additive” to the Kirkland brand – it brings them a set of images that would be hard to build and/or would require greater time and investment than the category deserves or might afford.

 

And the partner they’ve selected is excellent.  If there’s anybody to watch in the licensing industry, it’s Iconix.  They’re well-known for buying brands and sustaining or revitalizing them through licensing, whether it’s Danskin or Ocean Pacific. 

 

Costco understands that licensed brands are not “instead of” private label brands…they can all be a part of a total portfolio.  Here’s a store with a great brand and there’s still room for licensing because it brings with it brand equity that builds the overall Costco shopping experience – while increasing the Costco’s overall share of store brands. Improved profit margins will undoubtedly result.

 

I applaud both Costco and Iconix for an excellent marriage…completed with great bridal sheets and towels!

Outlet Malls Offer Viable Means for Upscale Brands to Reach the Masses

I recently made a field trip (ok, I was shopping too!) to the Woodbury Commons Premium Outlets in upstate New York and had such a great experience.  Despite its substantial size and a few “tourista” buses, it had the feeling of a small, quaint village.  It was laid out with similar brands adjacent to each other.  There was a plethora of upscale brands from Chloe, Chanel and Jimmy Choo to Furla Luggage and David Yurman. It got me to thinking about the fact that it’s always a risk for a prestigious brand to go “down-market” to malls and even retail outlets, but it’s a very savvy strategy if done well.

 

As we’re seeing more and more, women’s shopping habits are changing…she might be wearing Michael Kors shoes bought at Neiman Marcus, a Marc Jacobs dress from Loehmann’s and carrying a Mossimo handbag from Target.  And with that evolution, retailers can make adjustments to the channels they utilize to reach consumers.

 

In fact, I just saw an article this week about the fact that Saks and Nordstrom are headed to outlet mall locations.  Even consumers who typically shop in luxury retail stores are worried about wealth destruction, retirement savings, debt and whether they’re still employed.  But they still want to shop at the Neiman Marcuses of the world – and have the same great customer service experience – all while paying less.  Retail options such as this allow them to do that.

 

In the past, outlet malls were used to clear out overstocked merchandise, clearance items or irregular sizes without hurting full-line stores.  But that’s a thing of the past, with outlet mall stores now also offering merchandise that’s exclusive to their stores.

 

Wal-Mart and Target have been doing this for years, with great success.  Think of Target’s Isaac Mizrahi or Rachel Ashwell product lines, or even Wal-Mart’s Norma Kamali line of clothing.  Kohl’s is another one that does this very well, with powerhouses like Vera Wang, Daisy Fuentes and Avril Lavigne in their retailer-exclusive arsenal.  So in essence, retail players like Saks and Nordstrom are jumping into waters these pioneers have already tested…but this also provides the benefit of having a stronger brand image than what is typically found at discount stores.

 

So now you know what I think – definitely a smart strategy…what do you think?   

Is the Saturn brand strong enough to survive?

I had the pleasure of working with General Motors several years ago, back when the   Saturn division was being developed.  The brand had such promise, and it really delivered on that promise.  The goal almost two decades ago was to show consumers that an American automaker could build economical small cars as well as the Japanese could.  The result was a car that is fuel efficient, safe, reliable and affordable.  The Saturn brand has won too many awards to count over the years as the best value for Americans.  Along the way it’s also instilled a unique passion in owners.

 

So although GM recently announced plans to shed Saturn as part of its corporate restructuring in conjunction with taking more than $17 billion in emergency loans from the US government and taxpayers, don’t count them out yet.  Saturn dealers and GM managers are working on a potential plan that would spin off Saturn, maintaining the current dealer network.  Eventually, they would field a new line of non-GM vehicles under the Saturn name.

 

Beyond the 208 dealers, there’s also talk of a group of investors or even another automaker (perhaps from

China

) wanting to buy the Saturn brand.

 

Amidst so much bad news about the auto industry, it’s fascinating (though no surprise) that the brand that might survive all of this is the one that’s got the wildly devout owner base. 

 

Who knows what will ultimately happen?  In a perfect world, I have no doubt whatsoever that Saturn would come out on the other side.  The financial and logistical realities of the situation leave me uncertain as to what will happen.  But either way, it reinforces my belief that a strong brand that consumers identify with cannot be underestimated.

 

What are your thoughts on what will happen with Saturn?  What do you think it is about Saturn that inspires such passion?