Collective Licensing Pushes Growth

NEW YORK — Collective Licensing International is on the fast track.

Since its $91 million acquisition by Payless ShoeSource (later renamed Collective Brands Inc.) in March 2007, the youth lifestyle licensing firm has been moving ahead with several new initiatives to spur growth.

“Being part of a bigger company with bigger resources gives us a lot of strengths that we wouldn’t have on our own,” said Collective Licensing President and CEO Bruce Pettet.

“What Bruce has developed is a unique methodology for enabling brands to be built in the modern world for young consumers,” said Matt Rubel, president and CEO of Collective Brands. “It’s something that is really differentiated from any other licensing model.”

Flagship brand Airwalk is leading the way with exclusive athlete-designed collections, an aggressive advertising push and expansion into new categories.

“The growth really started to accelerate when we [began to market beyond] that core skate consumer,” Pettet said.

Today, Airwalk is sold in 102 countries. Forty percent of its business is derived from women’s, compared with just 10 percent in 2004.

As part of its growth in the kids’ market, Airwalk recently tapped pro athletes Andy Mac and Anastasia Ashley to design separate kids’ collections for Stride Rite stores.

The brand also is steadily expanding into new categories. Airwalk apparel for men debuted in fall ’07, and women’s will follow for spring ’09. “We want to continue to build the brand out into other categories, and apparel is really critical because it helps footwear,” Pettet said.

To promote the label, Airwalk is unveiling a fall campaign titled “A Day in Our Life,” starring indie rock band Lorene Drive and skateboard star Rodney Jones.

With Airwalk — and its other brands, which include Vision StreetWear, Sims and Lamar — Collective Licensing oversees design direction, as well as all marketing and advertising materials, for its global licensees. “We provide a whole graphics package,” Pettet said.

Its ads feature a mix of product culled from licensees worldwide, which helps build a universal brand image.

And in Collective’s youth lifestyle market, it is especially important to get the right advertising placement. “Everything is grounded with a digital platform,” explained Eric Dreyer, VP of brand management. “We’re trying to create content on the right Websites and blogs because that’s where our consumer is.”

Pettet estimated that about half of Collective Licensing’s total business is done with Payless and Stride Rite, but he stressed that the three separate companies operate autonomously under the Collective Brands umbrella. “We still have a royalty rate with Payless and Stride Rite. It’s the exact same thing as if we were working with someone like Sports Authority — everything we do is confidential.”

Since its inception in 2004, Collective Licensing has reported steady growth year-over-year, and despite the current flagging economy, Pettet is projecting revenues to vault 15 percent to 20 percent in 2008.

While footwear is the biggest part of Collective’s business, hard goods and accessories have been steadily on the rise.

“We’re still growing, partially because the space we’re in is still a growth area. … And our business is pretty diversified,” said Pettet. “We have a big business here in North America, but we do have business throughout the world, and we’re seeing growth internationally.”

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