Hot licenses enable retailers to party on with party goods - licensed products

Discount Store News, June 6, 1994 by Ela Schwartz

Ask buyers and vendors of party goods what's driving sales, and they'll tell you the answer - licenses like Power Rangers, Sesame Street, Disney and Barney. And the action is set to continue with upcoming properties like "The Lion King."

"What's selling is license, license, license for juveniles," said Nora Cline, buyer of greeting cards and stationery for Canton, Mass.-based Hills Stores. "X-Men and Barney still remain strong."

The party goods buyer for Caldor, the Norwalk, Conn.-based regional discounter, pointer out that licenses are 90% of the business in party goods. "Disney, Ninja Turtles and Ambassador's Power Rangers are all selling," he added. "I think 'Lion King' will be hot when the movie breaks."

For a Southern mass merchandiser, "Power Rangers are red hot. Shaquille O'Neal, Sesame Street and Looney Tunes do well for us. Barney is still strong but past its peak. We also carry Disney licenses like 101 Dalmatians, Little Mermaid and Beauty and the Beast."

The buyer added that his company is looking to expand the category. "We used to have a 27 1/2-ft. planogram. It's gone up to 40 ft., and we're looking at possibly expanding. Party goods is adjacent to stationery, and we're finding there aren't as many turns in books and magazines and the markup is only 20% to 30% as opposed to 50% for party goods."

Matt Hunnell, vice president of merchandising for Consolidated Stores, Columbus, Ohio, told DSN that the closeout chain is considering bringing in a party goods program of 20-ft. to 40-ft. depending on store proto-type. In the past Consolidated bought closeout party goods that included "bad licenses and mismatched product, as in red plates but no napkins," said Hunnell. "A well-stocked program has tremendous potential in terms of good margins and high turns. Greeting cards are very successful in our stores, and we have 500 stores. That's a tremendous volume we could be doing, particularly with a hot license. And the kids' portion is definitely license driven."

Guy Tuvin, marketing manager for Unique Industries, Philadelphia, said, "We're seeing more types of stores adding or expanding party goods sections, and we attribute this to the power of licenses."

The company will be introducing new partyware licenses this year to tie in with the summer movie release of "The Mask" and the November releases of "Stargate" and "The Swan Princess." The latter is an animated feature with more than 50 licensees on board.

Mike Brown, who handles product management and licensing for Beach Products, Kalamazoo, Mich., agreed that licensing is a driving force. "Sales are picking up and we have received a lot of commitments for upcoming properties," said Brown. "I would attribute the increase to three factors: an uptick in Sesame Street, Warner Brothers' Animaniacs and the expected appeal of 'The Lion King.'"

This year, Beach also began offering Lisa Frank's licensed properties: Kitten with Bubbles, Ballerina Bunnies and the Lisa Frank Halloween Magic Line for partyware.

Gibson Greetings, Cincinnati, carries 50 licensed properties, according to Karen K. Durand, director of marketing, everyday product. She stated that the company is doing well with Mickey and Minnie Mouse and is anticipating good results with the licensing program based on "The Pagemaster," a film slated to open in November.

Licenses make up the bulk of party goods at Caldor and Toys "R" Us. Both retailers carry "The Little Mermaid", "Beauty and the Beast", "101 Dalmatians", Sesame Street, and "Aladdin" from Beach Products, and Barney, Lamb Chop, and Ninja Turtles from Unique. Toys "R" Us also stocks a sizable selection of Unique's Batman license.

While Caldor offers 16-ft. of party goods, Toys "R" Us boasts a sizable selection of 32 feet of paper goods and 32 feet of party favors, streamers and balloons. Designs include Beach Products' Party Pac, which includes 16 napkins along with eight blowouts, invitations, plates, cups and hats and one tablecover in Disney or generic licenses, or Unique's Party Set, which packages together one tablecover, 16 napkins, and eight loot bags, blowouts, plates, cups and hats in licenses like Barney, Batman, and Ninja Turtles. An endcap features these party packs in Batman, Aladdin, Lamb Chop, Barney and Snow White styles for $9.99.

Since the average mass merchant doesn't offer the depth of a Toys "R" Us, licenses become a major factor for vendors in getting precious footage in a typical 16-foot section.

"Margins have become more competitive now than in the past for vendors," Brownof Beach Products, said. "And a hot license gives you an edge."

In an effort to get space, some vendors will even take back product that doesn't sell, although this not true across the board. The buyer for the Southern-based chain noted that "The vendor will always take back stuff that doesn't sell and give us new things. One company even took back someone else's design because they wanted that slot."

The buyer said that while many customers are paying 20% more for licensed goods, he sees some price resistance. "Off-price goods are big for us," he explained. "We have a core who may not have the money to get their kids Power Rangers partyware plus a present. Under those circumstances, most kids settle for non-licensed goods."