Youth sizes drive licensed sports apparel sales - includes related article on cross-licensing

Discount Store News, June 6, 1994 by James Mammarella

As sales of licensed sports apparel in youth sizes continue to boom, major retailers are competing in several ways that transcend pricing: bringing out new lines, "cross-selling" entertainment characters with official sports logos, and reshaping floor space to boost presentation values.

It means excitement. "Anytime you have an explosive growth area its positive - the key is keeping the growth alive: identifying the next level," said Mike Pape, co-buyer for licensed sports apparel at Kmart. The "next level" aimed at boys ages 4 to 12 (sizes 5 to 16) will extend Kmart's licensed sports designs from tees, hats and shorts to such lines as fleece and sweaters. The move, Pape noted, is tied to Kmart's "fashion right" commitment.

Kmart prices the licensed good at $4.88 and up. In contrast, sports specialist Herman's reports big success in selling its licensed lines - authentic replicas of NBA, NFL, NHL, MLB and college uniforms - in a different price ballpark, from $14.99k to $39.99. But, despite the price differential, there is one similarity between Herman's and the big retailer: presentation.

Pape asserted that at Kmart, "We have created team sport shops in the majority of our stores; all team sports product is pulled together to create a sports shop look."

At Herman's national buyer for apparel David McCarthy, said the chain is more than pleased with the power of its "Herman's Kids' Club" sections in boosting licensed garment sales - the company is now conducting a test of concentrating even more lines there. "In our Paramus store, we're crosss-selling equipment and apparel in a prototype" that will roll out to all 100 stores by fall 1995 if results warrant. Today, Herman's sells only apparel in the 144-sq.-ft. to 200-sq.-ft. Kid's Club sections - no hard lines.

The 6- to 12-year-old customer is generating ample business to drive all this attention, McCarthy observed: The tremendous growth in licensed garments has flatlined now; the youth category is the only area of growth."

Caldor Corp. president Mark Balmuth hinted at the same analysis: "We consider it [licensed sports apparel] a very important part of our boys' and men's business - particularly in the boys' area."

McCarthy said Herman's is winning by resisting to some degree another engine of growth embraced by mass discounters: cross-selling of sports and entertainment graphics. "I'd like to sell the character as the character. We do offer graphics showing Warner Bros. characters as sports enthusiasts, but not with a specific team logo."

Herman's has not jumped on the cross-selling band-wagon "I want to sell both - not one. If I put both together on one garment, I only sell one. To date, we've been successful with selling both garments."

Matt Sudhalter, divisional merchandising manager for New England regional discounter Stuarts, asserted that mass discounters don't have the same option. "Last year, sports was it - all you needed - this year, sports is strong but other types of licenses are coming on." He said buyers are "splitting the dollar," capitalizing on opportunities provided by the cross-licensing of official big league sports with such Hollywood products as "Looney Tunes" and "The Flintstones."

Besides tees, sweatshirts and outerwear, Stuarts' has seen strong consumer response to higher priced licensed accessories, such as backpacks, priced at $9.99 to $19.99. Sudhalter made the same observation on these items: "In strictly sports designs, we're a little at the top of the bell curve." Nevertheless, official sports logos are driving much of the kids' interests, and as Stuarts' president Denis Lemire said, "If it's important we're going to be in it - and we're in it."

"The beauty of cross-licensing," said CarolAnn Dunn, licensing manager for MLB (Major League Baseball) Properties, "is it enables us to attract fans who have a stronger affiliation with the character property" than with a particular sport. "It helps us broaden our target audience, it expands our product offerings by creating new channels of distribution. It can help retailer capitalize by opening up such areas as the gift and toy market."

MLB has been successful teaming up with such pop icons as Snoopy and the Peanuts gang, Looney Tunes, and even Betty Boop for an older consumer audience.

Retailer and manufacturers alike see more growth ahead in kids' sizes. As Kmart's Pape stated, "Kids identify with sports and fashion trends - putting the two together is a natural."

Herman's McCarthy added, "Parents are willing to spend a little more on a better branded item, one with the team I.D."

Age, Gender-Specific

Garments

"Demand has taken some new turns," said Gene Goldberg, general manager of retail licensing for NFL Properties. "In the old days, girls would wear boys cuts - now there's a demand for team-specific designs in girls' silhouettes. We've responded with our crossover "NFL Spirit" line, intended for women; we're now dropping it down to teen and youth sizes."

Demand seems to reach to smaller and smaller sizes. "The 0- to 7-year-old represents a growing opportunity," Goldberg said, "even infants and toddlers. Of course, it has to be redesigned to the infant/toddler silhouette before the mother makes the leap to buy."