Characters Continue to Drive Licensing in Fashion, and Homewares & Home Furnishings in Western Europe

As investigated in our “Character Licensing Trends in Fashion, and Homewares and Home Furnishings in Western Europe” Report, which examines major character licensing trends in the largest markets, Western Europe is key for character licensing across FMCG. It is an affluent and developed region and while fashion’s appeal and advantages are widely recognised by licensors, licensees and retailers, homewares and home furnishings is increasingly coming to the attention of businesses where penetration of licensing remains low.
Western Europe: Total Licensed and Non-Licensed Value Sales by Industry in 2016. Compares apparel and footwear against homewares and home furnishings.
Source: Euromonitor International

Key findings

Size of the prize

Total licensed and non-licensed value sales of apparel and footwear, and homewares and home furnishings sales reached USD367.7 billion and USD205.1 billion, respectively, in 2016 in Western Europe. Childrenswear, which is a key category for character licensing, is projected grow by USD4.8 billion by 2021, while LED lights will post a 21% CAGR over 2016-2021.

Athleisure, mini-me and DTR: Defining trends in apparel and footwear

Athleisure: While currently there are not many licensed apparel products on the back of this trend in Western Europe, this is projected to change in the coming years with new superhero and activewear clothing collaborations.

Mini-me: More mature, subtle and sleek character designs could well turn the mini-me trend threat to opportunity for licensing businesses.

Direct-to-Retail (DTR): Limited shelf space, increasingly squeezed margins and consolidation in retailing made DTR the ideal route for many licensors.

Apparel and footwear: Opportunities for character licensing

Childrenswear is projected to continue to be at the centre of character licensing programmes. Jeans is considered a potential growth area by the industry as it remains relatively untapped by characters. Sales of licensed character underwear are expected to remain buoyant, as the relatively disposable nature of these products translates into repeat purchasing, stimulating volume and value sales. Swimwear should also be actively targeted as increasing participation in swimming will continue to benefit the category.

Private label opportunity

Private label accounted for substantial 8% of value sales in 2016 in apparel and footwear in Western Europe. Its share across the region ranges from 0.2% in Sweden to 18.5% in the UK. Industry sources highlight this as an area which is still far from saturation for character licensing.

Rethink strategies based on gender

Until recently, character superheroes targeted mainly boys and men. However, Wonder Women in 2017, allowed its licensor to tap into women’s fashion more actively. In order to expand licensing programmes across more categories, it might be necessary to target the opposite gender, which may not historically be associated with a licence’s overall image as evidenced by Star Wars after its latest film release.

Homewares and home furnishings: The shrinking household effect

Licensing businesses indicate this as a clear challenge since there is limited space where licensed merchandise can penetrate in the space. However, this trend could also present opportunities since the rise of apartment living drives demand for multifunctional or modular solutions. This includes lift-up coffee tables, sofa beds, lift-up beds, folding islands, stackable chairs and even portable kitchens.

Design takes centre stage

In home furnishings, more design products with a touch of licensing or just some DNA of a property are becoming popular. There is greater demand for more subtle or “inspired by” designs rather than big logos. Just as designer/fashion house and character licensing collaborations continue to rise in apparel and footwear character licensing businesses could also work with designers to give their merchandise a cutting-edge and unique look. This could also give classic and evergreen characters a contemporary twist.

Performance textiles

Just as the popularity of sportswear increases on the back of the athleisure trend, a new breed of “performance textile” is emerging. This could open a window of opportunity for character licensing if it targets the sports/fitness market.

Increased competition among celebrity chefs

In both dining and kitchen categories, character licensors should pay particular attention to the increased competition posed by celebrity licensing. Above all, celebrity chefs such as Jamie Oliver have increased their efforts in licensing thanks to rising popularity of cookery reality shows such as Masterchef and The Great British Bake Off in the UK.

Fast fashion’s love affair with homewares and home furnishings

Fast fashion apparel and footwear companies have been very active expanding their product portfolios beyond fashion. This creates opportunities for character franchises as they already have licensing agreements with most of them in the fashion space. Licensors could expand their presence in homewares and home furnishings in line with key fast fashion operators’ growth in the industry. Zara, Primark, H&M, TopShop and Uniqlo could be ideal partners.