CK Licensing Mode Wins Broad Market

Calvin Klein (Calvin Klein) is one of the most successful American fashion brands in the past 25 years, and its retail sales exceed US $7 billion.

In recent years, although many other fashion brands are buying them back,

Calvin Klein brand is different from many similar brands (especially European brands), because the brand is almost entirely licensed, and has different contracts with a large number of partners, including the design, production and sale of the brand's products. From underwear, jeans to perfume, these partners then pay royalties to Calvin Klein.

In recent years, while many other fashion brands are buying their licenses, Calvin Klein continues to push its own brand out according to its own mode, which was born when the brand was founded, when Calvin Klein was still designing clothes for its brands.

Due to the success of this model, the Klein brand was acquired by PVH group in 2003. It is a popular brand alliance group, which has other licensed fashion brands including Tommy (Tommy Hilfiger), Van Heusen, IZOD, ARROW and Bass.

Celebrating the completion of the new London London Museum of design at the former Federal College

Permission to operate does not prevent us from controlling everything.

Q: Calvin Klein is a brand that grew up in North America. Now I can see this brand wherever I go.

But in Europe, the brand seems to have little sense of existence.

Can you talk a little bit about your priorities in the European market? And what is your existence in Europe compared to Asia? We know that you have a very large business in Asia.

Tom Mori (hereinafter referred to as answer): This is what you see, but sometimes it is different from the fact.

In fact, 30% of our business is in Europe, 50% in the US and 20% in Asia.

So our business in Europe is actually more than that in Asia.

We have more independent stores in Europe than in Asia.

Our business model for Europe is mainly independent store mode.

We do sell in department stores, but an important part of our European and Asian business models is independent stores.

Q: does the independent store refer directly to the stores you run and run?

Answer: No, not directly to us.

Our main business license.

Fortunately, we now have such a target, but not always.

We have been in Europe for 15 years. We have terminated the vicious license and found a good partner.

Warnaco is our biggest target. Our cooperation with them is very enjoyable, including the global cowboy license and the global underwear license.

Q: Yes, I understand that in all the different geographical areas, you have more than 40 licensing contracts in different product categories.

I am very curious that you decide to continue to operate in your way. You know that many brands of the same kind are buying their licenses, and they want to bring things back to the brand.

If most operations and customer related elements are controlled by others, you may have little control over yourself. You can control everything.

But the advantage is, for example, when you expand your business, you need much less money to open stores.

A: the fact is, we have absolute control.

We control everything.

Our contract is so complex that neither of you can imagine it.

If you walk into a store, there is nothing in it that we do not design or permit.

Shop location, design, retail equipment, fixtures, usually product types in stores, all creative, all advertising, whether institutional or cooperative advertising, and visual effects, we will be responsible.

Now I can say that we have more than 700 independent stores all over the world, and there are more distribution outlets and store outlets, but we have been tracking independent stores since they are really very important brand development platforms and revenue drivers.

Q: how do you monitor such a large storefront network to ensure that customer experience and brand communication are the same as your expectations?

Answer: very difficult.

Of course, we can't directly supervise 700 or more different stores, so this part is related to the permission business that I have just said.

We all know that our license cooperation is beneficial to them and beneficial to us. At the same time, we protect our brand, do reasonable things for the brand, and comply with the policy of setting up.

We have been conducting on-site checks, and in every corner, we have offices in Milan, Hongkong and Tokyo.

If we really see something that makes us unhappy or we do not agree with it, we will immediately communicate with the target and solve the problem.

15 years ago, we would not stand idly by and tell them, "do you know that we need to start a licensing business rather than an independent mode of operation?"

What is the truth? We already had a huge licensing business.

Q: is this Calvin Klein's will?

Answer: Yes.

I remember sitting with Calvin at that time, about 14 or 15 years ago, we talked about hiring people around the world to take care of everything, but not everything, but we need a lot of competent people to make sure that all the licensees are doing what we approve of, no matter where they are.

I said at the time, "I understand this concept, but it is impractical, so we have to employ thousands of employees."

From a financial point of view, this is not feasible.

What we need to do is to terminate those vicious licensing contracts.

People just need to know Calvin Klein.

Q: do you still control all internal marketing?

A: Yes, we have an internal advertising department, we have an internal public relations companies, we have a large internal design organization, or design every detail of a product sold around the world, or approve such products.

From a conceptual point of view, as long as we are good products, we do not always care who designs it. We do not agree with the products of Calvin Klein brand.

Q: do you think your customers understand all the relationships between Calvin Klein's sub line brands? You have even released CKOne clothing, and CKOne has its own perfume series.

CKOne has so many different markings with Calvin Klein's products. How do you get it into the minds of consumers at once?

Answer: whenever you are operating in a diversified price area, there will be a risk of confusion, whether it is us or Armani (Armani), Ralph Lauren (Ralph Lauren) or any other brand.

Ralph Lauren is an incredible company. They have more business areas than we do.

In continuous research, we find that when we talk about our brand with our customers, they look at this brand more simply than in our industry.

For them, everything is just Calvin Klein, when they enter a shop, if they like a product, they will buy it.

They would not think, "Oh, it's too puzzling. Which Calvin Klein is it?" as long as it was Calvin Klein Brand Company, they bought it.

In the past few years, we have done seven or eight studies, not only in the United States, but also in Europe as a whole. I think this is our brand creation model.

But each of our sub line brands represents different things, the price range is different, and the target customers are different in scope.

Although I say so, I think we are involved in most of the businesses that we should take part in.

We receive requests for permission every week.

Almost anything you can think of will appear on my desk, of course we all refuse.

For any new business category, the first question we ask is: "is this useful for brand building?" if we are convinced that we can enhance our brand, we will begin to consider this opportunity to increase revenue.

Fashion series can produce media coverage value.

Q: of course, the business you own and run inside is Calvin Klein fashion series, designed by Francisco Costa (Francisco Costa) and Italo Zukeli (Italo Zucchelli).

According to my preliminary rough estimate, this is only a small part of your business, but it may take up a considerable part of your expenses: fashion shows, advertising and designers.

What kind of marketing function do you think Calvin Klein fashion series has? What role does it play for such a business that only has an effect on the bottom line of the account?

A: This is not a business that has a role in the bottom line of accounting, but in fact, it is never possible.

For us, this is marketing consumption. We create amazing media opinions based on this business.

Public relations departments create 400 million dollars a year in the same public opinion. This is huge. We believe that this will have a very important impact on our global brand image.

This is a very small business, but it is a very important business.

This is the only business we do not need to use license mode.

The main reason is that the proper operation of the business requires considerable cost investment and often does not make money; if it is to shake Qian Shu, then it will be insignificant from the point of return.

This business has been declining since early, so from 2009 spring and summer

For the time being, our fastest growing business is in Asia.

We are developing very well in Asia. We are negotiating with a luxury retailer. If successful, we will allow them to take over all Asian Affairs and open flagship stores in Beijing and Shanghai, China.

For this small business, I spend more time than any single small business. First, Asia is very important, second, because Asia is much more complicated than our European business.

Q: if Calvin Klein fashion series created $400 million media coverage value for you, is that the ultimate driver of underwear and perfume sales? Can you conclude the relationship between them?

Answer: This is hard to quantify.

When we do customer research, what we hear is that media coverage will have an impact on how they perceive our brand and will have an impact on their brand image.

Practically speaking, every time we design clothes for these celebrities, they end up entering the grocery store tabloids.

This will certainly affect the customers of department stores.

People who often go to grocery stores and see these magazines are not luxury consumers, but this consumer will be influenced by magazines. Then we have amazing reports.

This year, the media coverage of all our award-winning fashion series is on the rise, and the speed is amazing. This is really very important.

We believe that in return, the brand image is more than just attracting someone to buy something, but we still think it can play a bigger role.

Q: although they can't afford the dress of Calvin Klein fashion series, maybe they can afford Calvin Klein's underwear?

Answer: underwear is usually the beginning for young people to understand this brand, especially for men.

This is also found in our research.

What they want most is a set of Calvin Klein underwear.

Q: when I think of Calvin Klein underwear, I think of the underwear in the advertisement of Kate Moss (Kate Moss), and the advertisement of Mcgee Marky (Marky Mark).

For customers who are beginning to contact fashion, this is indeed the product they want most.

But your business model has been widely used, not just fashion companies like Armani and D&G, but also other types of companies.

Can you tell me a little bit about how you view your position in the market and how do you protect your established property rights?

A: the market competition is very intense, and business has become more difficult, but our current business is still very strong. On the basis of this growing strength, the annual growth rate is between 5% and 10%.

The way we can do this is to carry out product marketing and innovative marketing very frequently.

This is how we can keep our lead.