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”Licenses can offer added value, allowing better margins with less risk”

Sebastià Coma, Licensing Manager, Madness

04/10/2011

Sebastià Coma is Licensing Manager for Madness, a Catalan company specialised in apparel. As Coma explains, Madness is focusing on Spanish properties in order to counteract the effect of parallel imports. However, he is also are aware that the company must take into account properties, products and the target audience before starting a new line of products.

Why did Madness opt for licensed products?

We saw that licenses can offer added value, allowing better margins with less risk. It is not the same to sell a shirt with a generic design than to sell a shirt with a brand.

We started as a distribution company, with very narrow margins, and we discovered the possibilities the licensing after a promotion for Disney.

What factors do you take into account when choosing a license?

Now we try to choose licenses from the Spanish geographic area, as we to try to avoid the effect of parallel imports. Especially as the dealer who receives the goods does not make money, as prices come too tapered.

Obviously this does not mean that any Spanish license is good. There are properties that are not suitable for the products we make. And also even within the categories we work with there are some things we have to consider. We have many football properties in our portfolio, but is very difficult to achieve profits with others than FC Barcelona, Real Madrid, Atlético Madrid and Athletic Bilbao.

We also have the figure of the coolhunter. Ours works a lot on flea markets: if he sees a pirated copy of a property, then there’s a good chance that this property could sell well. That's how we decided to take SpongeBob, after his phone call.

And of course, we also work with the properties that sell better, as Ben 10, so we can compete in the market with our commercial rivals.

What new properties will Madness work with in 2012?

We have opted for Clanners, Sesame Street, Generator Rex and Dora the Explorer. We will also have Ben 10 and we are negotiating other properties, in sports as well as entertainment.

How does piracy affect the the licensing business?

Currently parallel imports are doing more damage. Piracy has been pursued vigorously and has fallen sharply. In contrast, parallel imports are official products done in other countries of the European Union, and therefore they are not illegal.

They could be prevented, as does FC Barcelona, controlling through the labels what licensees can distribute in which markets.

How do you think the Spanish licensing business could change in the next year?

Much will depend on each sector: apparel is very different to toys, for example. With regard to apparel, I have many doubts and I think that the market should be watched on a day to day basis.

It is very difficult to make long term plans. For example, in the case of entertainment, there are more and more platforms, and consumption is also changing every day. Football licenses are more stable, but there are also changes: for example, 25% of those attending the FC Barcelona stadium are women, and are consuming the team licensed products. But this does not happen in Madrid.

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