June 27, 2005

It’s a brand-savvy dog’s life for retail licensing

By Angela Moore

NEW YORK (Reuters) - Fido might seem just as happy drinkinghis water out of your toilet as he would a Homer Simpson waterbowl.

But retailers are betting pet owners are a bit more finicky-- and fashionable -- and willing to pay for new lines of petproducts from well-known brand names.

Dog owners now can indulge their inner fashion stylists byoutfitting their pets in SpongeBob SquarePants dog collars orElvis dog sweaters, for example, rather than no-name items.

At the International Licensing Show in New York last week,leading dog brands like the American Kennel Club and Milk-Bone,and entertainment companies like Fox and Nickelodeon werebanking that the growing pet products industry will end upbeing a gold mine.

"This is a huge untapped market," said Virginia King,executive director for Fox licensing and merchandising."Whether it's a collar or a leash or a T-shirt or a sweater,it's probably one of the biggest potential growth areas forretailers."

Part of this growing trend is the humanization of pets.

People see companion animals as extensions of themselves,which has led to an explosion in designer pet clothing,high-end accessories, swanky carriers and toys based onfamiliar characters.

Americans will spend more than $35.9 billion -- whichincludes food, vet care and services like grooming -- onpet-related products in 2005, according to the American PetProducts Manufacturers Association.

In contrast, the U.S. toy industry rang up $20 billion insales last year.

"If we buy kids a licensed product because we think it'scute, we might do the same for pets," said Sean McGowan, ananalyst with Harris Nesbitt.

"But kids are not indifferent to brands, and pets largelyare," McGowan said. "If you buy the licensed product, you'rereally buying it for yourself. So there's a limit to how faryou're going to go with it."


Fox is developing a line of pet accessories with licensesfrom both the animated television show "Family Guy" and lastyear's teen nerd movie "Napoleon Dynamite."

It's a natural evolution from the lucrative licensing dealsassociated with the Fox network's long-running animated hit TVshow "The Simpsons," whose characters' likenesses -- includingpot-bellied dad Homer Simpson and underachieving son BartSimpson -- appear on everything from underwear to backpacks.

Universal Studio's consumer products group is working onpet accessories licensed under the "Curious George," "KingKong" and "Scarface" brands. And it is looking for pet productopportunities with retro movie and TV brands such as "AnimalHouse," "American Graffiti" and "The Munsters."

Fox is a unit of publishing giant News Corp.; Universal Studios is a division of media company NBC Universal,a unit of conglomerate General Electric Co. ; andNickelodeon is part of Viacom Inc.

Scholastic Corp. , best known for its children'sbooks, is pairing its popular "Clifford the Big Red Dog"character with dog food.

"There is a tremendous market in pets. For many people,their pets are like their children," said Al Kahn, chiefexecutive of 4Kids Entertainment , which is thelicensing agent for the American Kennel Club brand.

"I don't think the growth has even started. We are just inpreliminary stages. Many more pet products are going to beintroduced, but like anything else, this, too, can beoverdone."


JAKKS Pacific , which makes Cabbage Patch Kids andCare Bears for human kids, recently bought a line of pet toysand treats with licenses such as "Shrek," "SpongeBobSquarePants" and Barbie.

Even corporate brands are getting a piece of the action.

DaimlerChrysler unit Jeep makes petcrates and plans to move into pet carriers.

"Pet products have become such a popular category," saidDebra Joester, chief executive of The Joester Loria Group, alicensing agency representing Jeep. "I'm seeing more and morepet owners buying toys, clothing, even boots and Halloweencostumes. It's an emerging market, and we'll explore anylegitimate opportunity."