Merger and acquisition activity among licensees around the world has been a notable trend in 2019—as it was in 2018—as consumer products marketers continue to come together to strengthen their position in the marketplace. The reasons for the consolidation vary:
- Category extension. Clothing marketer Delta Galil purchased The Bogart Group, an intimate apparel specialist, in a deal announced in June. Delta Galil’s business extends into a variety of apparel segments and demographic groups; the agreement strengthens its position in the swimwear and bra categories. Delta Galil manufactures for partner brands including 7 for All Mankind, while Bogart works with fashion labels and companies including PVH, Jockey, and Hanes.
- Geographic expansion. German toy company The Simba Dickie Group added Los Angeles-based Jada Toys to its corporate family in January, giving it a foothold in the U.S. market. Jada, best known for its die-cast and radio-controlled vehicles and preschool toys, holds rights to properties ranging from Hello Kitty to The Fast and the Furious, while Simba Dickie’s licensing portfolio features Masha and the Bear, Mia & Me, Wissper, and many more, marketed across brands including Smoby, Schuco, Nicotoy, Carson, and Simba.
- New distribution channels. Cartamundi, a Belgian card and board game maker, acquired the United States Playing Card Company from Newell Brands in June. The merger helps Cartamundi expand into new markets such as casinos and cardistry (the growing world of card performance), as well as new geographic markets. Cartamundi’s licenses range from Disney, Hasbro, and Mattel properties to James Bond and Belgian football club the Red Devils. U.S. Playing Card, whose brands include Bicycle and Hoyle, holds licenses such as Coca-Cola, Jack Daniels, Anne Stokes, and Margaritaville, among many others.
- Cross-promotional opportunities. Masterpieces, a maker of puzzles, games, and playing cards, bought Fanpans, a marketer of bakeware, and Baby Fanatic, an infant products company, in May and July, respectively. Both Fanpans and Baby Fanatic, as well as Masterpieces, hold licenses from the major U.S. sports leagues and colleges. The move gives Masterpieces more products to cross-promote and cross-merchandise to its sports-loving fan base, as well as more distribution touchpoints.
As noted, these 2019 deals continue a trend that was ongoing in 2018 as well, with merger and acquisition news involving licensees occurring at a fast pace last year, especially in industries such as toys. And of course—in an era dominated by big players on the one hand and small niche operations on the other—licensors, agents, and retailers are similarly looking for opportunities to consolidate where it makes sense.
Raugust Communications’ monthly e-newsletter goes out next Tuesday, August 20, 2019. Each issue features a Licensing Topic of the Month and a Datapoint research spotlight that complement the trend coverage in RaugustReports. Subscribe to this free publication here; you can sign up on the same page to receive RaugustReports in your in-box twice a week, if you have not yet done so.