Interview with Ciarán Coyle, President & COO, LMCA and Alan Kravetz, CEO, Full Sail IP Partners
We catch up with Ciarán Coyle and Alan Kravetz about their huge announcement…
Can you tell us about the launch of Full Sail IP Partners and what lead to the joint venture between LMCA and Warburg Pincus?
[CC/ AK] In the 34+ years since its founding LMCA has been approached by many companies and individuals offering to finance a brand acquisition, but the offer was typically a one-off and purely a financial proposition. Warburg Pincus had a vision of the opportunity in strategic brand extension licensing and a desire to invest therein for the long term, which led them to us. They approached LMCA’s founder and CEO, Allan Feldman with a real passion for our unique space and with the desire to build a long-term relationship with LMCA to acquire and grow brands. Warburg Pincus’ long-term orientation, interest in our business, impeccable reputation, history of success, and global footprint convinced us that we had, finally, found the right partner.
And what makes the two companies ideal partners together? What unique attributes do LMCA and Warburg Pincus bring to the partnership?
[CC/ AK] LMCA has a long history of working with some of the world’s best-known brands, building their awareness and earnings through long-term strategic licensing programs. This approach to strategic brand building through meaningful product or service extensions has been the hallmark of the agency’s success. This track record could not have been achieved without developing an intimate knowledge of the client, their company culture and their vison or purpose. This is what attracted Warburg to LMCA.
Warburg and LMCA share the same philosophy in building long-term, global partnerships to drive value for our clients. However, each company has different – but complementary – areas of expertise which will make for a strong and successful partnership.
How will the business model work – will LMCA and Warburg bring together their portfolios or will the companies retain their separate entities as well?
[CC/ AK] LMCA and Warburg are joint investors in the Full Sail IP Partners venture but the individual company resources will remain separate. In other words, LMCA’s existing agency business and client portfolio will remain separate from Full Sail, and Warburg Pincus’ other business investments and clients will remain separate from Full Sail. However, all brands acquired by Ful Sail will be developed exclusively by LMCA though a licensing business model.
What about the brands that Full Sail seeks to acquire – what are you looking for?
[CC/ AK] We look for brands which have the potential for long term growth with long term committed licensees; we’re not looking to churn through brands or licensees. We’re industry agnostic and love both B2B brands and B2C brands for both products and services. We will target brands that are aspirational and authentic with a high degree of awareness. That’s what is important to a potential licensing partner – the instant recognition of a well-known brand versus trying to market their products under a brand which may take considerable time and investment to develop in-house. That awareness doesn’t have to be across all consumers or businesses but can be a niche opportunity if that group of buyers is big enough and identifiable. The brand needs to be authentic in order to have a story to tell which potential customers want to be part of and it needs to be real, rather than made up, because information has never been easier to find and dishonesty is death. The brand needs to be aspirational because the licensee must be able to get more for the product or service with the brand than without or the license has no value. Brands which LMCA has licensed such as HP, Westinghouse, Snuggle, Cummins, Sharper Image, Mack Trucks, Melitta and others share these attributes.
The last year has certainly been challenging for all – do you see a major uplift for the industry in the future? And how do you think it has weathered the storm?
[CC/ AK] A rising tide floats all boats. As the economy recovers we expect the licensing industry generally will grow following the broader economy. From our perspective, the licensing model weathered the storm quite well. Though many people tried a new brand during the lockdowns because of shortages of some products, good brands still command premium pricing. By and large the impact to licensed brands was felt by category, parallel to the impact of the pandemic on non-licensed brands. If you were in a “home” or distanced businesses such as food take out/delivery, cooking, furnishing, at home exercise, home entertainment, pet, work from home, boating, camping and other categories, you probably had a great year. If you relied on people to come to you, such as sit-down restaurants, sports events, movies or Broadway (and the merchandise those entertainment events launch) or if people formerly needed your products for the office, gatherings or travel, such as dress shoes and dress clothes, and travel goods, you likely had a very tough year businesswise. Hopefully for all of us, society and social interaction will re-root and life — and these segments — will discover their new normal.