(Ivanka Trump China trade) Licensees pay royalties to brand

World | 26 Sep 2017 3:09 pm

Ivanka Trump’s brand doesn’t actually make its products directly. Instead, it contracts with licensees who oversee production of her merchandise. In exchange, those licensees pay the brand royalties. The Associated Press asked Ivanka Trump’s brand for a list of its suppliers. The company declined to disclose them. The clothing, footwear and handbag licensees contacted by AP also declined to reveal source factories.

Abigail Klem, president of IT Operations LLC, which manages Ivanka Trump’s brand, said the company does not contract with foreign state-owned companies or benefit from Chinese government subsidies. However, she acknowledged that its licensees might.

"We license the rights to our brand name to licensing companies that have their own supply chains and distribution networks,” Klem said in an email. "The brand receives royalties on sales to wholesalers and would not benefit if a licensee increased its profit margin by obtaining goods at a lower cost,” she added.

But Michael Stone, chairman of Beanstalk, a global brand licensing agency, said lower production costs for licensees would ultimately benefit Ivanka Trump by freeing up money for marketing or lower retail prices, both of which drive sales.

"It gives her a competitive advantage and an indirect benefit to her financially,” Stone said. "The more successful the licensee is the more successful Ivanka Trump is going to be.”



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