Inside Licensing News and Notes, June 8, 2018
Five Below Launches First DTRs
Five Below launched its first-ever DTRs in Q1 ended May 5, CEO Joel Anderson told analysts as the company reported results for Q1 ended May 5, Details of the products and licenses involved weren’t disclosed.
The company’s net income in Q1 more than doubled to $21.8 million as revenue rose 27.2% to $296.3 million as sales in the leisure business, which includes licensed products, rose 29.5% to $144 million. Same-store sales increased 3.2%.
Five Below, which had 658 stores at the end of the quarter, opened 33 during Q1 and plans to open a total of 125 in the year ending in February 2019. It plans to remodel 10 locations this year, building on the five that were revamped in 2017. It will have a broader remodeling program in 2019 as a new 700,000-square-foot distribution center starts operations in the Atlanta area.
Five Below, Ken Bull, CFO, 215-546-7909,
Nathan’s Famous Licensing Revenue Rises on Increased Hot Dog Sales
Nathan’s Famous licensing revenue rose 13.8% to $23 million in the year ended March 25, largely on the strength of a 9.3% increase in sales of hotdogs through Sam’s Club, the company said in a 10K. The company’s licensing revenue from John Morrell & Co,, licensee for hotdogs, sausage and corned beef, increased 14.2% to $20.8 million. Morrell, which has the license through 2032, pays a $10 million annual minimum guarantee and a 10.8% royalty, Nathan’s said. It also has a licensing pact with Lamb Weston for frozen French fries, the royalty revenue from which rose 7.4% to $518,000. Lamb Weston recently extended the license through 2023, with an agreement in which the guarantee will increase 4% annually, Nathan’s said. The combined licensing revenue from Herman Pickle Packers (pickles) and Gold Pure Food Products (mustard) rose 2.5% to $319,000. Nathan’s also receives a 5.5% royalty on sales from each of its 142 restaurant licensees.
Nathan’s Famous, Ronald DeVoss, Chief Financial Officer, 516-338-5500
Vera Bradley Narrows Q1 Net Loss
Net loss registered in Q1 by Vera Bradley narrowed to $1.3 million from $4 million a year ago despite a 10% decline in revenue to $86 million on an 8.5% drop in same-store sales. The company has been stepping up its outbound licensing efforts in recent years.
The company’s “indirect sales,” which includes licensing revenue, decreased 22.9% to $21.1 million, due largely to a downturn in orders from specialty retailers and key accounts, the company said. Operating income from that segment fell 13.5% in the quarter (ended May 5) to $8.3 million.
The company has signed a series of licensing agreements during the past year, including one with CID Resources, which began shipping licensed hospital uniforms this spring. Direct sales at Vera Bradley stores declined 4.8% to $65.5 million.
Meanwhile, the company will close 15 stores as leases expire in the fiscal year ending in early 2019 as part of a broader plan to close 50 of its 111 full-line stores by 2021. At the same time, it plans to expand its outlet locations; there were 55 as of May 3, up from 52 last September.
Vera Bradley, John Enwright, Chief Financial Officer, 877-708-8372
Cryptozpic Entertainment Readies Pantone Card Game
Cyrptozoic Entertainment’s “Pantone: The Game” – Pantone’s first games license, and Cryptozoic’s first non-entertainment license — will launch in Q4. The 132-card game, which features 60 swatches in 15 colors, can feature 2-20 players trying to recognize pop culture figures by an abstract color arrangement. Cryptozoic licenses previously largely focused on entertainment-based games and puzzles such as those tied to The Walking Dead, Adventure Time, Lord of the Rings, DC Comics and others.
Cryptozoic Entertainment, Jamie Kiskis, VP Marketing and Products Development, email@example.com
Lionsgate Readying Now You See Me Magic Show Tour
Lionsgate is expanding its licensed live tour business. As the Hunger Games concert tour scheduled to launch with a 60-piece orchestra in Manchester, UK, the film studio signed a deal The Works Entertainment for a Now You See Me live magic show tour that starts in early 2019 in China. The Now You See Me tour will be the third? live tour? based on a Lionsgate film, following Hunger Games and “La La Land in Concert,” which had 100 performances in 20 countries.
Jennifer Brown, SVP Global Live and Location-Based Entertainment, 310-449-9200, firstname.lastname@example.org
The Works Entertainment, Glen Woods, CEO, 917-885-5433
Turner, Mattel Add New Licensed Parks, Play Areas
Licensed indoor and theme parks are continuing to take shape around the globe from a variety of property owners. Turner signs with Indonesian real-estate and hospitality investment group The MAJ Group to develop a 10.6-acre Cartoon Network park in Bali that is slated to open 2020. The waterpark/indoor entertainment center will feature Ben 10, We Bare Bears, The Powerpuff Girls and Adventure Time brands. It’s Turner’s most recent foray into licensed parks/sections, one that already includes the Cartoon Network Amazone in Thailand and sections in IMG World of Adventure in Dubai and Amaazia in India.
Meanwhile, a third Mattel Play! Area has opened at the De Schatberg resort in Holland, expanding a program that started with installations in in Liverpool (UK) and Dubai. The new Mattel area covers a half acre and contains Thomas & Friends, Fireman Sam, Bob the Builder, Angelina Ballerina and Mega brands.
Cartoon Network, Peter Yoder, VP, 212-275-6535, email@example.com
Mattel, Allison Carroll, Senior Mgr. Strategic Development Entertainment,310-252-2000, Alison.Carroll@Mattel.com