Lifestyle Brands and Collegiate Apparel – A Winning Combination

Lifestyle Brands and Collegiate Apparel – A Winning Combination

 

Pink by Victoria’s Secret, Vineyard Vines, Vera Bradley, Dooney and Burke, Ralph Lauren, Peter Millar, Brooks Brothers, Nike, Adidas, Under Armour, Champion, Dockers, Carhartt and Old Navy — all have a common link.

Each one is finding success licensing college trademarks in what has become an almost $5 billion dollar business.

By moving into this segment, fashion and lifestyle brands can count on appealing to a wide demographic: students, their parents, alums, and die hard sports fans. At colleges and universities throughout the U.S., trademark licensing fees collected from licensed product sales fund various educational initiatives. This is key as higher education costs continue to soar and state and government funding, especially at public colleges, is reduced. When college sports are added in, particularly at Division 1 schools, the trademark licensing and sports activities bring in significant revenue—making it an extremely lucrative business for the colleges and their brand partners. Talent agency William Morris Endeavor, purchased IMG Worldwide in 2013, and as a result manages the licensing rights for over 200 colleges and universities through its IMG College division (Collegiate Licensing Company). IMG College also has a decade long deal with the NCAA (National Collegiate Athletic Association) for various sports tournaments, conferences and more. Not to be left out of this growing business, WME’s arch rival, Creative Artists Agency, recently bought a small company, Fermata Partners, made up of former executives from IMG’s collegiate licensing division. Fermata is partnering with top colleges and recently signed storied Notre Dame-known for its athletic prowess, academics and well run consumer products program.

What is driving the growth of collegiate apparel and related products?

Since college sports have gone national, with televised football and basketball games on ESPN and various networks, fans tune in for appointment watching. Tournaments like Final Four have become must watch events. Winning college teams attract donor support from alums and beyond. Though controversy rages on about whether student athletes should get paid for “working” for their schools, brain trauma injuries are a hot topic, and devastating sex scandals have become part of the college sports landscape, fans continue to tune in and follow their teams.

Nike, Adidas and Under Armour can afford to outfit college teams. Each of these brands pay big bucks for the college players to wear their brands on field, tightly holding onto their turf. To further cement ties to the colleges, Nike and Under Armour have partnered with universities in their corporate back yards to create sports and performance training centers-Nike at University of Oregon and Under Armour at University of Maryland. These facilities may include design and testing labs allowing the brands to try out new product concepts with the athletes, from apparel to footwear and accessories. Under Armour CEO Kevin Plank, a University of Maryland alum and former Terrapins football player, recently donated $25 million to support building a sports performance center at the school. Such projects help build a school’s reputation and draw in more interest from the community, especially during football season, the sport that generates the highest revenues for Division 1 schools.

Collegiate apparel and its broad retail market

Colleges with teams on a winning streak and national exposure can see licensed products sales thrive. College bookstores on and off campus sell decorated tee shirts and sweats (down to infant sizes), plus key chains, stuffed toys, stickers, pennants and more to fans who want to show their school pride. These items warrant higher prices because of special embellishments, top quality materials, and royalty fees paid to the colleges. Retail chains including Kohl’s, Target, Walmart, Macy’s are also in the game of selling college tees and fleece in store and online. Rather than carrying a full assortment of colleges, national retailers localize their assortments to ensure fans of University of Minnesota, for example, can find merchandise at Target stores throughout the state.

For brands and manufacturers (licensees) who make, market and sell collegiate products, the colleges and their representatives have strict approval processes. Licensees are required to turn around fully decorated products within short lead times during major tournaments. Apparel makers must adhere to specific labor compliance guidelines. Those who do not can risk losing their retail space at a specific school. Alta Gracia, a manufacturer of tees and fleece, has developed a business model based on the transparency of their labor practices. New York University’s college bookstore has prominent displays of this brand, along with Champion and Under Armour.

Vertical retailers including Brooks Brothers, Pink by Victoria’s Secret, Old Navy, and Peter Millar sell collegiate goods through their online and physical stores. When Pink initially launched their collegiate line (it also has other sports partnerships such as Major League Baseball) there were protests at certain schools about the colleges “selling out” by allowing their brands to be screen printed on the back side of a panty. Fashion brands like Vera Bradley, aiming to expand their product assortment beyond their well-known print fabric bags, debuted a collegiate line this fall. As savvy brands know, attracting millennials and their burgeoning young families is critical to future growth – keeping the consumer engaged from cradle to grave.

And, getting a piece of the collegiate apparel business, no longer a niche market, is a win–on or off the field.