Licensing: The product has to support the name

By Cinde W. Ingram -- Home Accents Today, 5/1/2007

Whether licensed products drive sales is a question that splits the home furnishings industry. Some swear by the sales they enjoy through efforts with licensed lines, others say they want to build their own brand rather than one connected with a celebrity, a designer or museum.

Among those celebrity names are model Kathy Ireland, actress Jaclyn Smith and now financial personality Donald Trump.

One of the first and most successful home furnishings licenses is the World of Bob Timberlake, which has sold more than $1.4 billion at wholesale in furniture since it was launched by Lexington Home Brands in the early 1990s. Capel Rugs and Sedgefield by Adams, who were among the first partners to complete that lifestyle with related rugs, lamps and mirrors, celebrated their 15^th anniversary with Bob Timberlake just before the High Point Market.

During that market, Safavieh responded to demand for its latest license venture with Martha Stewart, introduced at the Atlanta Rug Market and being seen for the first time by many dealers. National Sales Manager John Thompson said the key to Safavieh's success with licensing has been working closely and directly with designer Thomas O'Brien and the design teams for Martha Stewart (and Stewart herself.)

"The Martha Stewart debut was very successful and far above plan for us. Thomas O'Brien is entering its second phase of development, and this line is just amazing," Thompson said. "Really, I think the litmus test for these particular products is they just stand on their own merit. They're authentic. We're finding customers walking in and saying, 'I didn't expect this.' They're surprised at the Martha Stewart line because it's not all machine-made; it's all-wool, handmade products and at price points representative of all lifestyle areas of the home."

Alan Palecek, whose home accents company has been involved with three licensing ventures in the past and remains among the National Geographic Home Collection licensors, shared a similar perspective. "It's always about the product," he said. "There's nothing that magic about it.

"Licensing serves a real purpose. It is a good way to get attention to new products or new concepts," he said. Whether based on a celebrity name or interesting designs, licensed products serve as an impetus for new collections and give a factory or retail store a focal point to rally behind, he said, adding "It isn't for everyone."

When asked why Palecek stepped away from past licensing partnerships drawing on the Norman Rockwell or Carol Enders names, he said simply, "It runs a course. With regard to licenses, it's all about the fit."

Limited licensing is the way Lisa Frudden, marketing/creative director of Palecek describes the Richmond, Calif.-based company's approach. "We like to be very selective," she said. "Our name is our brand and we don't like to diffuse our own brand."

Palacek displays its products near those it makes for National Geographic's eclectic home collections, inspired by explorers and exotic regions. Palecek's customer base also likes mixing in products ranging from accent furniture, decorative accessories, wall art and pillows.

Although NDI participated in licensing programs over an eight-year span with Winterthur, Colonial Williamsburg, Monet's Garden and Biltmore Estate for Your Home, the permanent botanicals manufacturer moved away from those efforts last year.

"Each one of those was a great partnership and it has worked for us in the past," said Mabry Cook, NDI president. "Every one of them was fantastic, still we wanted to continue to develop the products we felt were specific to what we were trying to accomplish, specific to our customers' design style and what they were looking for. The direction they were going in ¡ª not that it was wrong, but it's usually focused to a look so that's only going to appeal to a certain segment of customers. We want to make sure we're not too narrow because we want to appeal to the majority of our customers."

Oriental Accent, another company involved with a number of licensing programs, now focuses on three museum-related and two designer-driven licenses. The Dallas-based vendor of accent furniture, lamps, accessories and decorative porcelains began its license with Winterthur Museum in August 1996, with Biltmore Estate at the start of 1999 and Colonial Williamsburg at the end of 2003. Its license with Oscar de la Renta started in 2005 and, its most recent license venture with designer Mark Abrams began in October.

"You must have some ingredient that both companies feel is a mutual benefit ¡ª then the licensee will succeed," said Michael Yip, Oriental Accent vice president/general manager. "The main reason we license with a museum is our company traces its history to 1880. Biltmore Estate was built in 1895 so we're closely associated. A lot of collections the museums have are 18th century Chinese exports, artifacts, fine collectors' items and quality pieces. That's one of the reasons we maintain our licensing programs. I think the customer base is very similar in all the museums; they are well-educated, have a good taste level, are making good money and have fashion-forward homes and lifestyles.

"The other key is we have Oscar, who is a very classical fashion leader," Yip said. "Home furnishings and fashion are more and more close to each other so licensing with Oscar is part of the direction to get to the trend. Also, his name being related to Century gives our customer a sense of quality and prestige in the industry. The reason that fits with us is also our quality in execution. If they have the fashion and we can't execute it, it doesn't pay off. The benefit has to be mutual. Not every license will work."

Oriental Accent has moved away from Nautica and other previous licensing programs after the products became more like commodities or lost their unique spirit. With Mark Abrams' licensed line, Yip spoke of a long-time friendship with the former retailer who now is a product and showroom designer. "He has a keen eye and definitely has a level of his own taste. His look is kind of unique and I think it's a good mix. Many people can make products, but not many have good taste and can make products as well."

Talk of long-time friendships repeated as Capel and Sedgefield by Adams executives met at Timberlake's studio to celebrate 15 years of licensing. Timberlake reflected fondly on the long-time business relationships, which he said dated back to his parents and grandparents owning braided rugs made by Capel, based since 1917 in nearby Troy, N.C.

"They were the best and I went to the top of the list," Timberlake said. "It's been a wonderful and a growing association. It goes back to the old saying, 'Where your heart is, so also are your treasures.' For me, it was always about having comfortable surroundings and recognizing my heritage. It was a whole lifestyle, but nobody talked about it that way when we started this. Supposedly, it changed the furniture industry."

Walt Blackburn, CEO and president of Sedgefield by Adams, recalls writing Timberlake a letter to suggest his High Point, N.C.-based manufacturer could make lighting and mirrors to complement the World of Bob Timberlake furniture line. "With Bob, there's not been any lack of design inspiration because it's all through his art, his numerous collections and his personality," Blackburn said.

"It's been 15 years and it's still as strong today as it was 15 years ago," said Terri Thomas, director of product development, Sedgefield by Adams

"Obviously, the Timberlake license is our oldest," said Bruce Hric, Capel president. "We have enjoyed tremendous success developing rugs to coordinate with the Timberlake furniture line and we look forward to many more years of success. Of course, we have other licenses with Colonial Williamsburg and Biltmore Estate that have been successful also."

Thompson of Safavieh credited high consumer recognition of the Martha Stewart brand as playing a pivotal role in her collection's successful launch. Dealers were asked to stock at least six or more of the 6¡Á9 or larger size rugs and to purchase a unique and inviting display rack of 100 smaller rug samples in 18¡å¡Á24¡å size to show the range of the collection, which includes nature-inspired motifs such as lily pond and faux bois along with an assortment of fashion-forward colors.

"Martha Stewart has done such an excellent job in her other businesses empowering people to take charge of their decorating," Thompson said. "The person looking at the product is going to feel inspired, comfortable and secure in making a decision to beautify their home. Other licensed programs have had their niches, but I think this one is universal. It works in Victoria, Canada, in Key West, Fla.; Bar Harbor, Maine; San Diego or Kansas City ¡ª and our orders have proved that. It's as Middle America as it is Coastal as it is Urban.

Thompson added, "The success of the Martha Stewart line is judged not only on the initial order, but it's on the excitement of the dealer knowing that this brand draws people to their store and gets the consumer interested in rugs."

Palecek display features Greco-Roman influence in designs for National Geographic Home Collection Italia.