Schwartz & Benjamin Milestone: The Global Business Strategy

Schwartz & Benjamin has its sights set on international expansion, and its licensing approach reflects that goal.

The firm is working to create a streamlined stable of brands, joining forces with labels that already have a global presence — such as Diane von Furstenberg or Kate Spade New York — and the emergent lines poised for global growth.

Schwartz & Benjamin President Steve Shapiro puts the firm’s newest license with Derek Lam — including the diffusion line 10 Crosby Derek Lam, set to hit retail this fall — in the latter category.

“We think [that company] is going to get to the next level,” Shapiro said. “Derek Lam and 10 Crosby don’t have a lot of [worldwide] retail [right now], but we see a terrific growth pattern there.”

Derek Lam CEO Jan-Hendrik Schlottmann noted that the label is looking forward to building its footwear category through the partnership, which kicked off last summer.

“When Derek and I started our business, we decided we only wanted to work with people who are very talented, very smart and very nice,” Schlottmann said. “Danny and Barbara Schwartz, as well as Steve Shapiro and their great team, are exactly all that. … We are happy to be in what we hope will be a very long-term relationship with Schwartz & Benjamin.”

Kate Spade New York, for which Schwartz & Benjamin has held the footwear license since 2001, also is set to cover new ground. The label has long had a presence overseas, but in the next few seasons it will push the shoe division even further, adding wholesale in Europe and increasing its footprint in Asia, with preliminary plans to roll out shop-in-shops in Japanese department stores.

Diane von Furstenberg footwear also is ripe for more international growth, with Europe near the top of the list, according to Shapiro.

But even when the brand choices are solid, the licensing process itself can be challenging. Finding the right product mix and negotiating terms are complex endeavors, not to mention that today’s increased competition can put pressure on a company to snap up a hot brand without allowing adequate time to mull the pros and cons of the deal.

However, according to Shapiro, the keys to successfully navigating those hurdles are restraint and deliberately paced expansion.

“We don’t rush,” he said. “If we lose an opportunity [to grab a sought-after license] because we don’t want to be rushed, that’s OK. We’d rather make sure we have the resources to [successfully execute] the brand and satisfy the licensor. We’ve passed on opportunities because [the other party] wanted to move too fast.”

Knowing when to drop labels that are no longer a good fit for the firm also calls for ongoing evaluations. Schwartz & Benjamin recently closed its in-house brand Daniblack and parted ways with licensor Juicy Couture in an effort to pare down and adapt to the changing fashion landscape.

“[We rely on] market feedback and our own research and knowledge of how the brand is doing as an overall category or in our specific category of footwear,” Shapiro said.

CEO Danny Schwartz noted that staying open to change is a big part of the strategy.

“Flexible is a good word to describe our company,” he said. “We have to be careful about how many brands we have. We need to make sure we are not spreading ourselves too thin, and that we are giving the proper amount of support to each of our [existing] businesses so they can each win.”

In fact, Schwartz & Benjamin is not actively looking for new licensors at the moment.

While Shapiro said the firm is always open to opportunities, he added that “right now, less is more. Our house is about right as far as the number of brands [under the Schwartz & Benjamin umbrella, which includes four licenses and a production partnership with Rebecca Minkoff]. We are trying to maximize what we are doing in each of our collections before we decide to expand further.”

After all, what ultimately makes these partnerships work is impeccable execution, according to the executives.

“We need to give our licensors what they need to accessorize [their other categories],” Schwartz said, “but we also need a product that fits their DNA and can sell [as a standalone product] in a department store. We get into the heads of our brands. We listen to their design directors and take on whatever themes they are doing for the upcoming season. Each has a strategy for the segment they want to attack, and we listen to that. We like the fact that when the merchants come through our office, they see that each one of our brands has its own distinct look.”

“If you look at what we have today, they all serve different purposes in the market,” Shapiro added. “Danny calls it ‘licensing 101.’”

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