One-On-One with Iconix Brand Group’s Yehuda Shmidman, Part II
In September, I had the pleasure of sharing the podium with Yehuda Shmidman, Chief Operating Officer of Iconix Brand Group, at LIMA’s inaugural Retail and Branding Conference in New York. Iconix is the second largest licensor in the world and, in the aggregate, the company generates over $12 billion in annual retail sales by managing and marketing a diverse portfolio of more than 25 consumer brands including PEANUTS/Snoopy, London Fog, Royal Velvet, Mossimo, and Joe Boxer. Mr. Shmidman also heads up global business development for Iconix and this year he was included in the “40 Under 40” list by Crain’s New York.
In this second of two parts, Shmidman discusses the role of private branding, digital and event marketing, and how Iconix is breathing new life into its more mature Iconic brands.
Spieckerman: One of the licensing community’s big concerns is direct-to-retail or DTR deals. Of course, you guys have set the standard there, but the other big concern is private branding. Do you see private brands as a threat to your model or as a complement? And where in general do you see the brand mix going forward?
Shmidman: A big part of our model is trying to displace private labels. When you have private label brands that retailers create, oftentimes they offer a great product, and definitely at the right price, but when they stick a name on it that has no meaning, it’s really not a private brand, it’s just a private label. So in many cases, our positioning is to use our brands to replace that. For us, it’s about marrying our great brands with retailers who have great execution. In a way, when retailers use our brands to the fullest, we are their private brand and they get the best of both worlds: exclusivity, control through their sourcing, and at the same time, the value of the brand. In that way, I see private brands and our model as complementary concepts.
Spieckerman: In addition to your fully-owned brands, you also participate in several partial ownership joint ventures, one of which — Zoo York, I believe — you recently took to full ownership. Is that the natural progression, for you to move from partial to full ownership, or is it feasible to continue with partial ownership? Are there any limitations to this?
Shmidman: It would be wonderful to own all of our brands 100% worldwide but sometimes it’s strategic to have certain minority owners with us. For example, with Ed Hardy, we own 85% and the remaining 15% is owned by the tattoo artist himself, Don Ed Hardy. So, in that case, there is a strategic value to the addition. It really depends on the brand.
Spieckerman: Speaking of partial ownership, last year, Iconix acquired a majority stake in Peanuts, which I think is probably one of the ultimate iconic brands. What are your strategies for modernizing the Peanuts brand? And tying into that, how is Iconix approaching digital marketing, social media, and that explosion of touch points that weren’t part of the conversation when Peanuts became a beloved brand?
Shmidman: We have a really cool interactive concept that will debut next month as part of a Wired Magazine event in Bryant Park here in New York. There will be a huge Peanuts area showcasing a lot of our new visual initiatives. As to your more specific point, a lot of these technologies obviously didn’t exist 60 years ago, when Peanuts began and when the first comic strip was drawn. Today, we’re very much a part of a lot of new technologies that have emerged. You’re going to see new interactive storybook apps and a new mobile game that’s coming out in the next few weeks from Capcom. You’re going to see new E-books as well, and we have several digitally- and technologically-driven initiatives for Peanuts that will all hit in the fourth quarter.
Spieckerman: Do you follow any model with regard to the new media concepts that you initiate versus those that are brought in through partnerships, and how is that working with Peanuts?
Shmidman: It’s all mixed and doesn’t follow any specific formula per se. The root of what we do for a living is still the same, whether it’s technology or something else. We are a brand and marketing company. Peanuts.com has been completely revamped and that was a big in-house focus. There are other initiatives that we’ll develop with partners with an open mind. The key is that it’s really not about the way that things are partnered or the how partnerships are formed. It’s more about how we further the goal of getting the next generation to fall in love with Peanuts the way all of us did in the past. It’s about keeping Peanuts and Snoopy premier character brands and, as you said, iconic brands. I would agree with you that Peanuts is, if not the most iconic brand, one of the most iconic brands in the world.
Spieckerman: Absolutely. Well, another recent development has been Liz Claiborne’s brand selloff. Liz Claiborne is probably one of the better examples of a hybrid company that has managed a portfolio including both wholesale — what it calls partner brands — and direct retail brands. With this development, only its direct brands –Lucky, Juicy Couture, and Kate Spade — remain, which speaks to a shift in focus away from brand marketing and more toward that owned retail piece of the business. Does Iconix have any plans to complement its brand marketing model with more owned retail?
Shmidman: Our business hasn’t changed. We’re still very close to our retail partners. Our brands, by and large, have been growing. Look at the Mossimo brand. It’s been with Target for over 12 years, running strong and still growing. If you walk through a Target, you really can’t miss Mossimo. We’re committed to our charter of not owning inventories, so we’re not going to open up stores for our brands. We’re committed to being a pure-play licensing company. We do have some licensees who have opened up free-standing stores. One of them operates one hundred Ecko Unlimited and Marc Ecko stores in America, so there are examples of that, but we’re not going to open stores.
Spieckerman: You guys are obviously on a roll and you’ve made some fabulous acquisitions. You’re moving into digital marketing, you’ve expanded your international presence, and it’s all very exciting. Is there anything that keeps you awake at night?
Shmidman: I think the only thing that keeps us up at night is just doing better, thinking of ways that we can deliver value for our shareholders and maximize our brands while still staying true to them. Of course, we have a very aggressive nature innately. We have a “very humble” mission statement that basically says we want to be the premier brand company in the world. So that means we need to grow by buying more brands and by staying focused on the future.
Spieckerman: Thank you, Yehuda, for sharing your insights.
Shmidman: It was my pleasure, Carol.
Want more insights from executives who presented at the Retail & Branding Conference? Read Carol’s interview with HSN’s Bill Brand.
To learn more about how retailers are redefining scale and what the touch point transformation means to your retail strategy, join me for my LIMA webinar on November 16 at 12:00 pm EST. Invite your sales and marketing teams for a one-and-a-half-hour learning opportunity – no travel required!
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