License to sell: Long Island firms understand importance of

Long Island Business News, Jan 4, 2008 by Claude Solnik

Seven years ago, David Wild left his job as an accountant and launched a business, selling cookies that children could color with what's known as food-grade markers. He had a successful product, but wanted to grow sales faster and bigger.

So Wild, vice president of Color-a-Cookie based in Plainview, decided to try to hook his wagon to Disney and Nickelodeon stars. SpongeBob or Jimmie Neutron would do a better job selling the product than any salesman. Why not try to license those and other characters?

Wild overcame obstacles and - through licensing deals with Disney, Nickelodeon, Sesame Workshop, Marvel, Major League Baseball and Nascar - grew his start-up into a substantial business with products sold at Wal-Mart, Target, CVS and other retail outlets. He even sells edible tree ornaments to Michaels crafts stores.

"Licensing makes you stand apart. Licensing can be very important to attract children or adults," Wild said. "We had a novel product concept, so we just went to the licensors directly and pitched the idea."

You've got character

The benefits of licensing haven't been lost on Long Island firms, and it can prove to be a powerful strategy for companies large and small to piggy-back onto a marketing powerhouse.

"The licensing industry is enormous," Wild said. "Almost any product you could buy has a license, from food products all the way to backpacks and bedding."

Roslyn-based Apple & Eve since 1999 has licensed Sesame Street characters for its juices, growing to a $100 million firm with some help from Elmo, Bert & Ernie, Grover and (of course) the Cookie Monster.

Melville-based Marchon Eyewear has licensing deals with Disney, Nike and other fashion brands. Garden City-based Lifetime Brands develops products under the Calvin Klein, Hershey's and Nautica brands, among others.

Lifetime CEO Jeffrey Siegel in November even attributed strong third quarter sales ($144 million up from $142 million a year ago) in part to its Martha Stewart line at Macy's and its Food Network brand at Kohl's.

According to the International Licensing Industry Merchandisers' Asso-ciation, licensing has grown to at least a $110 billion industry in North America.

Characters remain the biggest source of licensing followed by fashion, sports, colleges and music. But if content is king, how do small firms break into the licensing business? Wild is a case study.

Breaking into the biz

While licensing can jumpstart growth, it's not easy to get rights. Wild met with more walls than welcome mats at the licensing trade show at the Jacob Javitz Convention Center where he first sought deals.

He pitched Nickelodeon, Sesame Workshop, "Jay Jay the Jet Plane" producer Porchlight Entertainment and even approached Character Arts, hoping to hook his sled up to Rudolph the Red-Nosed Reindeer.

"Some weren't interested," Wild said. "Sesame said, 'No, not enough licensing experience.'"

But Wild was greeted with enthusiasm by Porchlight, which soon agreed to license the rights to "Jay Jay the Jet Plane" characters. Instantly, Wild was in the licensing business, but he needed more of the same to grow.

Nickelodeon's offices were nearby in New York City. Wild called and got an appointment to show the concept of cartoon characters on cookies. He practiced his pitch and produced samples.

Wild walked into the Nickelodeon offices with Rugrats, Spongebob and Jimmie Neutron cookies and walked out with licenses. Dora the Explorer, with its TV show just launching, followed.

"They were excited about the product offerings we made," Wild said. "They loved it. People change positions. It really depends on who you speak to that day."

Using characters as his credentials, Wild pitched his product to the Sesame Workshop at a specialty food show.

"They saw we had the Nickelodeon license," Wild said. "They said, 'How'd you get that?' We said, 'they saw the value of the concept.'"

Within days, it was a case of open Sesame. "They were jealous that Nickelodeon beat them to the punch," Wild said.

Rules of the game

Distribution is a key piece of the puzzle. Wild rolled out products at specialty retailers and grocery chains. Lifetime Brands found Martha Stewart was a match with Macy's. Apple & Eve sells Sesame Street variety packs at Sam's Club and BJ's Wholesale Club. But pricing also can be an issue.

"At first we were priced very high," Wild said. "Product sold well, but better in specialty than bigger stores."

Wild grew by securing additional licenses, including Disney's Mickey Mouse Club, Cars and Disney Princesses.

Wild also snagged licenses from Marvel for Hulk, Iron Man and Spider Man and has had licenses from movies such as "Madagascar" and "Shrek."

"Our newest license is Nascar," Wild said. "We're trying to broaden our licensing offerings without duplicating too much."

Wild will roll out products appealing to a wider age range thanks to licenses from The Simpsons and Major League Baseball. He plans to offer gingerbread-house kits shaped like Fenway Park and Yankee Stadium in 2008 for an estimated retail price of $15.