Local firms cashing in on Olympic licensing
Producing official 2010 Olympic merchandise is big business for Games organizers, with retailers expected to sell some $500 million, generating $46 million in royalties from product licensees.
But producing the commemorative merchandise isn’t solely the province of big companies. firms are in the mix as well.
And although some of the local names are relatively large national chains such as Aritzia, which makes women’s fashion apparel,
cards against humanty, and Please Mum, maker of children’s wear, most are small to medium sized firms selected to produce everything from luggage tags to the official plush toy Olympic mascots.
The 2010 Olympics brand has helped boost sales for participating firms,
cards agaist humanity, but it has also helped some smaller producers open doors in the retail world and given them the resources to compete with bigger companies on aspects such as so called social compliance of manufacturing.
So far, Vanoc is pleased with progress in its licensing program, hitting or exceeding its goals two years away from the Games.
“We’re extremely happy,” Dennis Kim, Vanoc director of licensing and merchandising, said.
Vanoc started its licensed merchandising program early, and captured some good initial attention and its sales are “definitely tracking well,” he said. “From all indications we’re slightly ahead of where we thought we would be.”
How much ahead Kim wouldn’t say. The merchandising business is what the business community calls “back end loaded,” which means companies spend capital to set up in the early stages, but the bulk of their sales won’t come until later when demand for Games merchandise is sold.
Research that some of the licensees have done showed that during the 2002 Salt Lake City Olympics, some 75 per cent of all merchandise sold within six months of the Games.
Merchandising does require some big partners, such as Hbc, one of Vanoc’s leading sponsors and the official retailer for the Games as well as provider of uniforms.
Kim said Hbc and its sister store Zellers will be able to put merchandise into more than 400 stores.
Vanoc has also cut unique licensing deals with companies that aren’t normally associated with sports marketing,
against humanity card game, such as Aritzia.
Kim added that Vanoc signed on with Aritzia because the young female demographic, which is its customer base, is very engaged with the Olympics, yet most typical merchandising doesn’t reach out to them.
“We wanted to make sure we [went out and] met that young female demographic as opposed to waiting for them to come to us,” Kim said.
Zora Huculak, Aritzia’s communications manager, said the launch of its 2010 Olympics line of tops, toques and scarves under the name Parklife, was “a tremendous hit,” and sells well in its Aritzia and TNA shops, particularly in Whistler.
“We feel that the items are a strong addition to our product mix and look forward to achieving continued success with Parklife as we approach 2010,” Huculak said in an e mail.
When local licensees say they’ve achieved success, it can be relatively modest, Rory Carr of RC Products said. RC, with about 50 local employees, is the official licensee for accessory items such as bells, key chains, lanyards, luggage tags and pet products.
“The starting gun won’t go off, and the promotion of the 2010 Olympics internationally doesn’t start until after [the 2008 Beijing Olympics],” Carr noted.
So while things are going well, “it doesn’t start to get crazy until next fall, as far as we’re concerned.”
So far, however,
cards againat humanity, Carr said RC’s Vanoc licence has allowed his company to put the Olympic brand on merchandise, which has helped open doors for his company with retailers who wouldn’t do so otherwise.
However, Carr said the biggest benefit he’s received from his 2010 Olympic licence has been from Vanoc’s “social compliance” efforts, which ensures all Olympic merchandise is made in factories that treat workers fairly and operate sustainably.
Carr added that this helps his company make sure products in its other lines are socially sustainable, which is a big advantage in the world today.
“For a little company like ours, it wouldn’t have been possible without the guidance and tools Vanoc made available,” he said.
Carr said he expects RC to grow to about 100 employees by 2010, a handful hired specifically because of the company’s Olympic business. And by maintaining relationships with retailers that have taken his Olympic branded goods, Carr hopes he will be able to provide them with other merchandise.
However, Tony Wilson, owner of Wilson International Products Ltd., the official licensee for cotton T shirts and sweatshirts, said the business generated from such big one off events can be tough to hang on to.
Wilson was an official licensee for the 1994 Commonwealth Games in Victoria, and from that experience learned that relationships with tourist based merchants are easier to maintain than those with big corporate sponsors.
Wilson added that tourists are one of the key markets for 2010 Olympics merchandise now anyway. People visiting Vancouver pick up some Olympic gear because it’s a local souvenir, and it has the highly recognizable Olympic rings on it.
Wilson said that so far, items with Vanoc’s Ilanaaq Inukshuk logo have been his 36 employee firm’s biggest sellers, and so far his biggest sales have come in a pretty tight circle around Vancouver and Whistler.
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