What's in a name? Plenty, according to frame buyers, who are reporting licensed eyewear inventories as high as 100 percent. "We don't have anything that's not a name brand," says Scott Ellis, owner of Optical Elements of Orlando and Miami. According to Ellis, whose 2,000-plus inventory includes brands ranging from Armani to Cartier, "Licensing is where the eyewear business is...and where it's going."

Although Ellis's 100 percent is higher than most optical retailers, few buyers disagree with his observation about the importance of licensed frame products, and many are reporting typical brand name inventories of 65 percent and higher. Propelling the interest in name brands is the abundance of licensed products on the market and the consumer propensity for buying a recognizable name. What's more, there is little sign that this trend will slow down in the optical industry, despite a three percent drop in overall sales of licensed goods in 1998.

INCREASE IN BRAND LICENSING

According to the 22nd annual licensing industry survey by The Licensing Letter, North American retail sales of licensed merchandise dropped from $73.2 billion in 1997 to $71.5 billion in 1998, a decline attributed to decreases in entertainment and character licensing and sports brands. However, retail sales of merchandise based on corporate trademarks and brands, the sector so highly represented in eyewear products, reached $16.9 billion in 1998, a five percent increase. According to The New York Times, this increase reflects the growing number of companies using licensing. A significant trend is the growth in brand extensions. In the fashion arena, not only is licensing being adopted by more companies, says Martin Brochstein, executive editor of The Licensing Letter, "companies are starting licensing in more areas than ever before." The idea, reports The Sun (Baltimore, Md.), is to "equate the brand with a value, sear the brand into memory, then stretch it over as many formats as possible." Such extensions of a brand name result in both additional product and additional exposure--a "bonanza," says The Sun, of increased choice for consumers.

PRODUCT GLUT

For optical buyers, however, the growing amount of licensed product draws mixed responses. "There are too many licenses out there," observes Gary Kirshner, O.D., whose American Vision Center franchise store is located in Pennsylvania's King of Prussia Mall. "Anybody with a name seems to be getting into the frame business," he says, "and this is taking away from some off-brand lines that used to be good sellers." Buyer Barry Grossbaum, owner of Trapp Opticians in Westchester, N.Y., points out that the glut in designer lines and the subsequent diminishing of exclusivity is impacting his buying decisions. "We have scaled down our designer lines in the past year," he says, "and have gone more exclusive."

Stephen Sullivan, M.D., owner of Eye Health Vision Centers, a five-location, regional chain in Southeast Massachusetts, agrees there is an overabundance of licensed frame lines, which "makes life more difficult for retailers who have to keep up with all these licenses." He points out, however, that companies are simply responding to market demands. "It's hard to sell something that's a no-name," he says, "and to be heard above the volume of so many competitors." Therein lies the value of a licensed product--marketing, image building, and name recognition. "It's not the product that consumers pick," asserts Brochstein. "It's the brand."

CREATING THE MIX

Buyers report that this brand recognition factor is key in deciding which lines will end up on a frame board. "We have people who come in looking for specific names," says Mary Ann McDonald, buyer for the private practice of John T. Lindquist, O.D., Bakersfield, Calif. "Right now Nicole Miller and Eddie Bauer are hot names for us. As different names become popular we include them in our frame mix. We are carrying more licensed lines than we were two years ago," she adds, "and these lines now count for 65 percent of our inventory.

Kirshner notes that 70 percent of his inventory is licensed eyewear, a decision based largely on his location. "In my shopping mall there are nine high-end department stores and every one carries Ralph Lauren and Calvin Klein products. My numbers for these two lines are phenomenal," he says, "but I also carry lower end lines such as Esprit. I have a lot of walk-ins, my customers want the names, and I have something for everybody."

At Orange County Eyecare Optometry in Placentia, Calif., almost 90 percent of the practice is third-party driven, according to manager Judy Dougal. Yet 85 percent of their inventory is licensed product, a major shift in the frame mix since Dougal took over the buying responsibilities a year ago. "Although we have a good mix because of our insurance contracts, we needed more of the brand name products that people like and want," says Dougal. The decision has paid off. "Some of our clients stay only within their insurance plan," she says, "but that's not the trend. People are buying up, and it's the name that often makes the difference."

NAME RECOGNITION

Up to 65 percent of frame sales are third-party driven at Eye Health Vision Centers' predominantly medically driven practice, and in a similar approach to Dougal's, name recognition plays an important part of its buying strategy. Licensed products, however, make up only 35 percent of the frame inventory, down from 40 percent two years ago when the practice introduced its own private label "brand" name, Vejo (Portuguese for "I see"). Using marketing and brand imaging tactics comparable to those of high profile companies and targeting the largely Portuguese, blue collar population in their market area, Eye Health Vision Centers has built name recognition for its private line, which, according to chief development officer Jay Carney, now accounts for 14 percent of inventory, but 35 percent of sales. Brand and designer names account for approximately 24 percent of sales but remain an important part of the frame mix. "Many people are highly motivated by label consciousness," says Carney. "So we have a variety of products to cover the spectrum."

The company addressed this "label consciousness" when it created the private label "brand," developing a marketing strategy aimed at establishing trust and building brand loyalty with its clientele. According to licensing pundits, it's a strategy characteristic of successful licensing programs. "Strong brands with deep bonds and relationships with consumers are going to be the ones that will survive," states Judy Fearing, senior vice president of marketing for ESPN, in The Sun.

PICKING THE WINNERS

Despite the importance of a recognizable name, however, buyers agree that's not the only criteria for deciding which high-profile names to include in the frame mix. "The name is not enough," says Dougal. "Color, shape, function, and uniqueness all affect my buying decision."

Kirshner, who carries a large selection of designer lines, also wants product that is "in sync with the designer's image." Ellis, whose primarily high-end business is 50 percent tourists, agrees, noting "the feel" of different designers distinguishes their products. "Jean Paul Gaultier has funky clothing, and his eyewear is funkier, too," says Ellis. "Giorgio Armani and Calvin Klein, on the other hand, have a more conservative image. Customers recognize these images, and that helps them pick out a frame." Uniqueness is also important to buyers, especially as name products flood the market. "Why have two lines that look the same?" asks McDonald. Grossbaum agrees, pointing out that generally he "stays away from designers that you can find all over."

Buyers agree that quality is a given in their purchasing decisions, regardless of the name. "This is a client business," stresses Ellis. "Although most name products are good, there are some marginal products with a big name." And consumers recognize the distinction. "Customers can sense the difference," says Kirshner. "For a small price differential, they'll opt for the better frame and pay the extra money." 

Deciding what's hot and what's not also figures into the buying decision. "Must-have lines change as the trends do," says Ellis, "so it's important to pay attention to the market and keep up by attending trade shows, reading trade and fashion magazines, talking to reps, and listening to what people say when they come in."

The consumer response to name products is what convinces observers that the trend toward licensed frame products will continue. "People identify with brands," says Brochstein. "And whether they acknowledge it or not, they buy into the concept of name brands." Optical buyers agree." Licensed eyewear," proclaims Dougal, "is around to stay." FB