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Market Research


The North American Licensing Industry Grows for Third Consecutive Year

According to the LIMA annual survey


Sales of licensed products continued their upward trajectory in 2013 for the third straight year, resulting in an estimated $5.655 billion in royalty revenue in the U.S. and Canada, translating to $115.75 billion in retail sales, an increase of 3.3% and 3.25%, respectively, above 2012 levels, according to the International Licensing Industry Merchandisers' Association's (LIMA) Annual Licensing Industry Survey.

Leading the advance are the industry's five largest categories: Character, Corporate Trademarks, Sports, Fashion, and Collegiate. Together, they represented 94% of the overall licensing revenues in 2013.

- Character-related merchandise (encompassing Entertainment/TV/Movie and Celebrities) is the largest classification, accounting for $2.66 billion in royalty revenues and an estimated $51.44 billion in retail sales, up 4.3% from 2012. Royalty rates are generally higher in this category compared with others, accounting for 47.2% of total industry revenues. In this category, digital technology continues to adversely impact the appeal of traditional toys, and the world of digital apps has created new brands that have expanded to both digital and physical retail channels.
- Corporate and Brand Name. Royalties in this category were estimated at $965 million, representing about 17.1% of industry revenues, and an estimated $22.5 billion in retail sales, or 19.4% of the overall licensed retail business. There is a strong growth in home improvement and home decor are expected this year and in the future.

- Fashion royalties rose to an estimated $770 million, accounting for 13.7% of total revenues, up 2.0% from the prior year. Based on these royalty rates, retail sales of licensed fashions translated to $16.9 billion in 2013. The changes in the industry are being driven by greater use of exclusives for mid-tier and mass merchandising segments. Category growth is linked to beauty (i.e., fragrances/perfumes) as well as strong performance in the apparel and the accessories segments.

- Sports royalty revenue rose 1.9% to $698 million over the previous year, translating into retail sales of about $12.8 billion. Here we can find longer strategic partnerships, continued reorganization at retail, growth opportunity in retailers' own label products, and direct-to-consumer sales through digital and specialty physical channels show strength. An important long-term opportunity is the extension of sports properties in healthier food and beverage segments, travel and the women's market.

"Licensing activity enjoyed strong growth in 2013, reflecting the importance of licensing as a business and marketing tool," said LIMA President Charles Riotto. "Our industry and our members continue to strategically leverage the equity of their brands, characters, and intellectual property with even more creative and robust licensing programs that successfully connected with consumers and drove healthy sales."

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