THE BIG INTERVIEW: Nicolas Loufrani, CEO, Smiley

Samantha Loveday

By Samantha Loveday

May 22nd 2015 at 10:00AM
THE BIG INTERVIEW: Nicolas Loufrani, CEO, Smiley

We talk plans for 2015 which will see the Smiley brand reach a whole new level.

Firstly, can you tell me the history behind the brand?

Smiley was founded by my father Franklin in 1972. He created a newspaper promotion to highlight good news during a time when the news was pretty depressing, and Smiley was used to highlight to readers the bright side of life through uplifting news stories. This was the early origins of our licensing program and we worked with a host of Europe’s leading media titles until we eventually started to extend this to Smiley being licensed for promotional use by brands.

It was during the 1970s that Smiley started gaining popularity within the music and pop culture scenes. It was adopted by the peace and love movement of the 70’s and then became iconically associated with the explosion of dance music and DJ culture in the 80’s. Smiley was at the epicentre of this movement and our licensing program exploded as Smiley tees flooded the dance floors of clubs and raves globally, and the brand started evolving into a host of new product categories to meet the demands of being an icon of 80’s pop culture.

The next major landmark was in 1997 when I joined the business and recognised the need to develop the brand into digital, and with that connect with a new generation of Smiley consumer. I noticed the use of early emoticons in mobile and digital and revolutionised Smiley forever by creating the first graphic emoticons used in technology, and SmileyWorld was born. This allowed us to create a collection of icons that expressed thousands of emotions and could be applied to a variety of products. Through this we created loads of new business opportunities, and also attached the brand to a whole new generation of Smiley consumers - the digital natives.

The brand has evolved a lot over the last 40 years, from the front cover of France Soir newspaper to become today the champions of the happiness movement, a globally recongnised brand, distributed in thousands of stores around the world, trademarked in over 100 counties and across more than twelve product categories.

How did the brand perform over the past 12 months?

2014 was a great year for Smiley. Turnover increased by 25 per cent compared to 2013. There's a lot of reasons for this – a mixture of good planning, rewards for our brand repositioning work and also a bit of good luck.

I’ve spent the last few years moving Smiley away from its traditional ‘nuts and bolts’ consumer licensing model and repositioning it as a standalone lifestyle brand, by investing heavily in our design and marketing studio and this has caused real growth in the last year.

Today to be a true lifestyle brand it is no longer just about apparel, accessories and beauty products, but almost every product you can licence, because it is expressing who you are and what you stand for in life. Food, back to school, stationery and small gift items are some of the most important lifestyle products for kids and teens today and technology and even toys have become key lifestyle products for all ages.

Nowadays people from a very young age have a need to express their personality and this is why one of our core values is 'express yourself' which has two levels of understanding, expressing your emotions with our icons in the digital world and expressing your personality with our branded products.

We are doing all of this and it is creating new business and new consumers for Smiley all the time.

How many licensees does it have to date (in the UK and worldwide) and in which categories?

We have over 230 licensees worldwide and over 50 of these are selling in the UK, however our real strength in the UK market is in our direct to retail partnerships. We currently have product in-store with the biggest and best names on the high street. From TopShop, River Island, H&M, Urban Outfitters, Primark, Tesco and Zara – we also have capsule collections in-store with Moschino and Anya Hindmarch.

Smiley has licensees across twelve product categories covering a really broad range of products from; apparel, FMCG, home decor, cosmetics, toys, gift, back to school, stationary, publishing and even promotions.

What are some of the best performing products?

Apparel continues to be our best selling category, we have DTR deals with some of the world’s most successful middle market retailers which has seen 3.2 million unit sales alone in the last 12 months. We have also opened over 50 franchised stores in China for both adults and kids, which will grow to 200 by the year end, and have 120 apparel corners throughout the Middle East, whilst in India we also have 200 ‘shop in shops’ across the country.

We are seeing significant growth within FMCG right now, with new deals in place and a variety of new opportunities available across all of our food categories including - sweet and savoury snacks, treats and even dairy and beverages - with the majority of these products incorporating our 3D render Smiley.

SmileyWorld continues to be one of the major players in the back to school market and we have significant retail exposure throughout Europe through our licensing partnerships with Herlitz, Lannoo Publishing and also NICI Gmbh, who all featured in our top ten licensing partners for 2014.

Finally, our publishing division saw existing partner Grund sign a global distribution deal off the back of the huge retail successes we have had in France with our SmileyWorld sticker books, diaries, calendars and colouring-in books which is creating opportunities throughout the world of publishing.

Are you looking to expand the consumer products programme further this year – for example into new categories or territories?

We are planning to spend the rest of 2015 consolidating our current growth globally, whilst we focus the business on a very major development for 2016. We are in pre-production on an animated kids TV show – Smiley Kids – where we are partnering with an expert in this field Dacher Keltner, who is a professor of psychology at the University of California, and where his research focuses on the biological and evolutionary origins of compassion, awe, love, and beauty, and power, social class, and inequality. He is also director of the Greater Good Science Center and is most famous for his best selling books ‘Born to Be Good’ and “The Science of a Meaningful Life’. He is a really amazing and inspirational person to be working with and this is creating a whole host of new opportunities for Smiley. As a result we are developing a complete range of new and exciting Smiley products to compliment the release which will build on the work Keltner has done in exploring emotions, early stage development and EQ.

Do you have any special marketing initiatives or promotional activity planned for 2015?

What really stands Smiley out from the competition is our ability to support our licensees not only through innovation but also by adding value to their licensing proposition. We have six external PR agencies in London, Milan, Paris, Berlin, Madrid and Shanghai which place licensees products in the leading media across all product categories. Last year alone we generated 450 press clippings and over €5 million media value for our licensees.

Smiley also adopts an innovative and customer-centric approach to digital by creating rich and engaging content from licensees products across multiple digital platforms. Our in-house design team creates bespoke content for social media campaigns that will promote our licensees products to over 4.2 million social media followers and generates traffic, web visibility, site visitors and e-commerce sales for our partners sites.

We also have an amazing celebrity seeding network and this allows us to place the best products on the world’s leading celebrities, in the last 12 months alone we have seen our licensees products worn in public by Miley Cyrus, Rita Ora, Chris Martin, Katy Perry, Rudimental, Idris Elba, Michael Fassbender, Jamie Jones and many other global tastemakers.

We have highly prestigious catwalk collaborations with Moschino and Anya Hindmarch currently that positions Smiley centre stage on the catwalks in Milan and London as well as in some of the best independent boutiques and department stores in the world.

Finally we have an exclusive partnership with Space Ibiza where we produce exclusive co-branded merchandise for them and also enjoy a host or Smiley activations at one of the world’s best dance music venues.

Brand extensions and our highly innovative approach to digital and conventional marketing really keeps Smiley one step ahead of the competition.

What has the retail reaction been like to the brand?

Retail is key to us. Whether these are DTR deals or meeting with retailers to help push our licensee products. We are the only licensor of our size to have a team meeting all big retail chains and exhibiting in product trade shows (like Sial for Food or BBB for clothing). Retailers really like that, they understand that through our sales team, our marketing and social media team and our design studio we are completely dedicated to offer our partners and outstanding level of service to help them grow their business and assist them with all their needs.

What are some of the main challenges you've come up against? And how have you overcome them?

The main challenge is explaining trade people we do things differently and we are a different proposal. This whole industry is looking for the next big jackpot. Outside of that big thing, they only do small bets. Yet we know that when a licensee or a retailer does things professionally even with mid size brands like us, the results can be outstanding. We have a lot of case studies like that and the challenge is often to have people listen to you and think outside of the box. To overcome them is just hard work, constant follow up, investments and patience. I've ended up signing over 70 per cent of my targets in the past 15 years. I know the 30 per cent will follow within the next five years, even if they don't believe it yet.

What would you most like to achieve with the brand in 2015?

We have several major deals in discussion and I hope to finalise them in 2015. We also want to finalise our new kids show. We have some of the best broadcasters in the world who are super excited about the unique concept we have created. We now need to go to the final stages.

We also want to structure our company better to service our partners better and grow the sales of our existing collections. This is the key to us. It's so hard to start a project you really want it to work. We're not always looking for the next deal but trying to nurture the existing ones.