Often the trick to making sure your company remains solid throughout times of economic trouble is to have an eclectic mix of brands in your portfolio. A couple of evergreens, a collection of up and coming hot prospects and some brands which will bring in a slow and steady stream of revenue whatever the weather.
While 4Kids Entertainment MD Sandra Vauthier-Cellier admits that the firm isn’t immune from the recession, it’s lucky to work with a range of strong brands that have grown despite the challenging climate.
“The last 12 months have been very difficult for the whole industry and we are not immune from that,” she says. “The recession is, without question, the dominant issue facing businesses and our own expertise in the industry has never been more critical.”
The last year saw 4Kids completely restructure its licensing and merchandising division, meaning it now works as one team dealing with the whole of the UK and EMEA. “I am very fortunate to work with a team of very talented people, all of whom have different skills that complement each other perfectly, leading to a very healthy and productive group dynamic,” Vauthier-Cellier explains. “The different skill sets and areas of experience within the team mean that we can use a number of perspectives to deal with any particular project. Everybody can now see the bigger picture and share best practices, and we can react quickly to any market changes.”
2010/2011 is shaping up to be another busy year for the team. It will continue to promote Dinosaur King, for which it has already secured licences in over 80 categories, while Yu-Gi-Oh is due to celebrate its tenth anniversary with specific marketing and communications activities planned, plus a 3D anime feature film due for release this month in Japan.
“We also have a host of new properties which are presenting us with lots of opportunities,” Vauthier-Cellier continues. “Before Christmas we signed The Kennel Club and Crufts which, along with Chicaloca, will actually be represented by 4Sight, our division which represents teens and adult brands. Both these brands will help us reach new demographics and extend into new categories.
“Chicaloca is an aspirational fashion brand from South Korea aimed at teenagers and women aged 16 to 25. It has already been popular in numerous territories across the world. Key target categories for the UK, France and Belgium include apparel, accessories, gifts, health and beauty.
“Finally, WordWorld is a pre-school property which has won three Parents’ Choice awards and, recently, two Emmy Awards [for Best Children’s Animated Programme and Outstanding Writing in Animation]. It is an innovative multimedia property aimed at pre-schoolers that playfully brings words to life through a unique methodology that embeds words into the objects they represent, resulting in easier word recognition for children.”
4Kids already covers most licensed sectors, from toys and video games through to gifts and collectibles. However, Vauthier-Cellier would like to expand the food and beverage and health and beauty business, with Chicaloca, The Kennel Club and Crufts earmarked as perfect brands to do this. “We are also looking to widen our demographic as the core market for the majority of our brands is six to 12. This is already happening through WordWorld and Chicaloca.”
Growth in other territories is also important – for example 4Kids opened an office in Hong Kong in May 2008 to cover Asia. “It very much depends on the brand, but in general the UK, France, Italy, Germany and the emerging Eastern Europe markets are our most important territories. Despite the challenging market conditions at present, there is still the opportunity to prosper overseas and the licensing industry, ourselves included, will continue to target India and China, because both markets offer significant potential growth.
“However, these opportunities are matched by the unique challenges that expanding into these markets can present. For example, the fragmented infrastructure, as well as the very high levels of inflation in India at present.
“What is interesting is the increasing globalisation of the market. Just as Western firms have been targeting the east, so Eastern firms have increasingly targeted the west. Whereas it was once Japan that was developing and exporting its own properties, in recent years we have seen much more come out of South Korea and India.”
Looking further into 2010, Vauthier-Cellier is confident in 4Kids’ brand portfolio, but knows that the landscape is changing for the entire licensing industry. “Like everyone else we need to adapt to an increasingly complex environment. Price points and product value will continue to be key, as well as the battle for shelf space, with weak products suffering as a result. Consumers will always buy into stable, evergreen brands and this is what we will concentrate on and develop.
“Another big challenge is the increasing fragmentation of the media – there are a huge amount of different TV channels and internet sources competing for kids’ attention, which makes life difficult for the licensing industry. However, good properties and sound brand management will lead to solid growth patterns.
“From our own point of view, we are also looking to develop more properties, such as Artlist Collection: The Dog, The Pig and The Cat, Chicaloca, The Kennel Club and Crufts that are not so heavily linked to TV. We will be looking to diversify our brand portfolio to broaden the demographics we target and the categories we work with.”
So, what advice would Vauthier-Cellier give to smaller companies just dipping their toes into licensing industry waters? “Stay focused and try not to pursue too many properties at any one time. It’s far better to concentrate all your efforts on a small core of strong brands that fit in with what you are trying to achieve. Sometimes less is more.
“New companies need to build relationships with their partners and focus on quality rather than quantity, particularly during the recession. Work closely with licensees and licensors and remember that licensing is a joint venture; everybody is in the same boat and working towards the same objective.”