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Strategies for Allocating Long-Term Value in Fashion and Apparel License Agreements

By Lois F. Herzeca
April 29, 2010

Fashion and apparel goods are an important source of branding opportunities for artists and celebrities. One of the most vexing economic issues in fashion and apparel licensing deals is the task of allocating the long-term value of a branded product launch. If a branded product line is not generating significant sales volume in the early years of a license, the celebrity licensor may prefer to terminate the existing license agreement in order to enter into potentially more lucrative arrangements. Conversely, the fashion/apparel licensee may have invested significant financial resources to develop and promote the brand and wants to reap the long-term economic benefits of the brand's eventual success.

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