I’ll have to dig up the press kit to double check but I seem to recall that more than a dozen years ago, Puma and Fila were already selling about $250 million a year worth of Ferrari branded shoes and apparel. While a lot of people mocked Cadillac brand-strategy-whatever Melody Lee for her recent comments about turning Cadillac into a luxury brand, not just a seller of cars, licensing deals and brand extensions like the Porsche Design retail shops are now big business in the car biz.
License Global magazine says that Ferrari’s 68 licensing deals now generate $2.6 billion a year in merchandise sales. Those who mocked Ms. Lee might be surprised that her employer, General Motors, is actually the most successful car company in the world at generating revenue from loaning out their brand names, logos and other intellectual property, with $3.5 billion in sales of licensed merchandise ranging from reproduction trim parts to scale models to guitars. While the terms of those deals are not necessarily public, royalties on licensed merchandise are typically 7-12% of the wholesale price. You can find out about Ferrari dice and Hummer cologne (it helps GM keep the trademark active, even if they killed the automotive brand) in a pretty extensive article by Rebecca Ruiz over at the New York