Video games, T-shirts and even cologne that bear Ford Motor Co.’s Blue Oval are fueling a robust licensing business for the automaker.
Retail sales from Ford’s licensing business grew 50 percent since 2005 to $1.5 billion last year. Nearly 60 percent of these sales occur before Father’s Day and in December.
The automaker’s resurgence from the recession is fueling opportunity and global interest in the retail market for products bearing Ford’s name and logo. The demand has compelled Ford to sell not only through traditional online, dealership and trade show channels, but in mass-market stores from Walmart to Saks Fifth Avenue.
“Now we’ve stepped up to the point where we want to be where the consumer is,” said John Nens, Ford’s manager of global brand licensing.
This includes Mustang Cologne for Men, a fragrance licensed by First American Brands Inc. Big-box stores will begin selling the cologne — described as woody and aromatic — this summer. Ford also is pursuing a licensee to produce Ford-branded tools including wrenches and screwdrivers.
The licensing business has rebounded in North America, where sales of licensed merchandise rose for the first time in five years, to $109.3 billion last year, according to the International Licensing Industry Merchandisers’ Association’s annual survey released last week. Licensers claimed $5.32 billion in royalties.
“Corporations used to be extremely protective of their brands — and they still are — but in a difficult economy, more businesses are looking at their brands as leveraged assets, not just family jewels,” said Martin Brochstein, senior vice president of the association.
Licensing allows consumers to see the brand as more than an automaker, especially when it comes to a garage with Ford-branded kits with shelves, cabinets and workbenches that can cost five figures.
“The natural theme is that Ford owns your garage,” said spokesman Mark Schirmer. “The dream is not only do you have two cars in your garage, but the floor, the cabinets and everything inside is Ford.”
According to Nens, Ford ranks third among automaker licensers, behind Ferrari (“an aspirational brand,” Nens said) and General Motors Co., owner of the Corvette nameplate.
Ford has about 400 licensees worldwide that make products, from Mattel Inc. Hot Wheels to Teleflora LLC flower arrangements in a 1948 Ford F-1 pickup.
The automaker doesn’t accept requests from just any business that wants to appropriate its image. Merchandise is carefully regulated, even ensuring that Ford vehicles get a fair shake in video games and that, say, a 1965 Mustang isn’t paired against a brand-new Ferrari.
The automaker has refused requests to attach its name to alcohol, guns and mature-rated video games, Nens said. Ford turned down a request from Farmington Hills-based Eternal Image Inc. to produce a Ford-licensed casket and urn.
“We are a family company,” Nens added.
Ford gets a cut of retail sales, but most goes to licensees.
Brand exposure is more important than licensed merchandise sales, said University of Detroit Mercy marketing professor Mike Bernacchi.
“It keeps the pipeline humming, in terms of dollars and emotion,” Bernacchi said.