Weekly E-News, Issue #221, July 17, 2007

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Retail Sales Down, But Wal-Mart Bucks the Trend
The Commerce Department reported late last week that retail sales fell by 0.9 percent last month, the biggest drop since August 2005. Despite June being a heavy discount month, many retailers suffered disappointing sales at their stores, although Wal-Mart surprisingly escaped the bout of summer doldrums.

A new consumer spending survey released by the America’s Research Group (ARG) indicated that many shoppers were both reducing their spending and postponing big-ticket purchases.

According to the survey, about 40 percent of 1,000 shoppers polled in early July said they reduced spending in June due to higher gas prices, while about 22 percent said they delayed a purchase of $599 or more.

“The impact of gas prices on the American consumer’s psyche is not going away,” Britt Beemer, chairman of ARG, says in the report. “The data reveal that retailers will experience difficult times and reluctant consumers for the important back-to-school and fall shopping periods.”

Wal-Mart posted a better-than-expected 2.4 percent same-store sales increase, citing strong year-over-year sales of flat-panel televisions, MP3 players, video game hardware, and laptops and desktop computers to offset ongoing weakness in its apparel and home categories.

The retailer said its computer sales were fueled by the recent introduction of select Dell computers at all Wal-Mart stores and Sam’s Club locations in the United States.

For July, Wal-Mart said it expects same-store sales to be up 1 to 2 percent, but cautioned that its mostly paycheck-to-paycheck shoppers continue to be challenged by higher prices at the pump. The company also said it sees the same pressures on customers in many of its international markets.

Less successful were J.C.Penney and Macy’s, which both took a hit in June. Penney’s same-store sales fell 1.5 percent, while Macy’s, which operates both its namesakes and Bloomingdale’s chains, posted a 2.7 percent drop in its June comparable sales, worse than its initial forecast for sales to be flat to down 2 percent.
Retail categories across the board suffered sales declines. Among the biggest losers, furniture and home furnishing purchases tumbled 3 percent, building materials sales slumped 2.3 percent, clothing sales fell 1.4 percent, department store sales dropped 1 percent, and consumer electronics purchases experienced a 1.4 percent decline.

But there were a few positive spots. Sporting good sales rose a moderate 0.4 percent. General merchandise sellers increased their sales by 0.3 percent, while sales at health and beauty supply stores rose 1.2 percent last month.

UK’s TV Hit “X Factor” a Licensing Hit As Well
In anticipation of the fourth season of “The X Factor” in the UK, FremantleMedia Enterprises (FME) signed up more licensees for the talkbackTHAMES TV talent show.

For the very first time FME has taken “The X Factor” into the toiletries and confectionery categories. ScentUps UK has been licensed rights to produce “The X Factor” branded shower gel, lip gloss, body shimmer, eau de toilette, and perfume for both men and women. The toiletry range will be available nationwide in retailers such as Superdrug, Asda, and The Perfume Shop beginning in fall 2007. Kinnerton Confectionery Limited has been granted rights to create a range of “The X Factor” confectionery. A confectionery board game has been developed exclusively for Marks & Spencer stores, and Tesco has developed five exclusive lines including an advent calendar, novelty-shaped chocolate micro phones, chocolate bars, popcorn in a collectible tin, and chocolate truffles; all products will be available throughout the UK beginning fall 2007.

Additionally, FME inked a deal with David Halsall, which will see a range of electronic musical toys such as guitars, keyboards, drum machines, and harmonicas available this fall. Global International Limited has been granted rights to produce palm-sized handheld karaoke and recording MP3 machines. 

“The X Factor” fans can also treat themselves to jukeboxes and fridge magnets from Steepletone Products Ltd., as well as a branded DVD board game that has been developed exclusively for Marks & Spencer stores by Hallmark Cards plc.

Says Dominic Burns, senior vice president, licensing, UK, “We are really pleased to announce such a wide range of new and exciting products for ‘The X Factor,’ which will be in store for Christmas 2007. We have evolved ‘The X Factor’ to become a true lifestyle brand that fans can interact with across multiple platforms and in all areas of their lives. These products are designed to appeal to all ages and demographics and we are actively looking to work with more licensees to bring an even wider range of products to the market for 2008.”

The X Factor” is produced by talkbackTHAMES, the UK production company owned by FremantleMedia and Syco for ITV.

Jetix Europe, Shout! Factory in Home Entertainment Deal
Jetix Europe and Shout! Factory inked a new agreement in North America, which will see the leading independent entertainment company handling home entertainment distribution of the animated series “Pucca” and “Ōban Star Racers,” on behalf of Jetix Consumer Products (JCP). The exclusive license agreement includes the distribution of 39 half-hour episodes of the award-winning “Pucca,” as well as 26 half-hour episodes of the sci-fi action series “Ōban Star-Racers.”

The deal was introduced by Branscome International, which has also introduced a number of other home entertainment deals in Latin America and Asia.

Mattel Signs Mighty Fine Apparel Deal
Mattel is partnering with Mighty Fine on three distinct collections of Barbie apparel under its Mighty Fine, Public Library, and Doe brands. The line of Ts, knit tops, and fleece is targeted at juniors and adults and arrives on shelves at boutiques and specialty and department stores in the fall. Mighty Fine and Doe will debut three and five Barbie styles, respectively, in the fall, with Public Library adding seven styles in spring 2008. Fisher-Price will also partner with Mighty Fine under its Mighty Fine & Mini Fine brands to produce a new line of nostalgic T-shirts for adults and toddlers, as well as onesies, featuring classic Fisher-Price art.  

JCPenney Offers Picture-Perfect Promotion
“Sesame Street” fans have a picture-perfect opportunity to get up close and personal with their favorite characters via a new promotion at JCPenney Portrait locations. Children can pose on the “Sesame Street” stoop with an Elmo or Abby Cadabby plush or choose from a variety of other portrait options such as borders featuring “Sesame Street” images and phrases. Children in more than 260 studios can also enjoy a 30-minute play date with their favorite friends by watching a “Sesame Street” DVD made exclusively for JCPenney Portraits.
       
Museum Takes On New Expedition
The American Museum of Natural History’s collection of more than 30 million specimens and cultural artifacts from around the world has inspired a new product initiative under the Expeditions brand. With the help of Brand Sense Partners, AMNH will develop and launch consumer products in categories that include home furnishings/accessories, jewelry, personal accessories, and stationery.

“American Idol” Inspires Apparel Line
Lyric Jeans Inc. reached agreement with FremantleMedia for a line of lyric-inspired “American Idol” branded apparel line for department stores, mid-tier, and mass-market retailers. The initial Lyric Jeans-American Idol collection will focus on the contemporary juniors’ and girls’ market and expand into other areas including children’s wear.

MIPCOM Junior Issues a Challenge
In partnership with License! Global, MIPCOM Junior will be hosting “The Licensing Challenge,” a pitching session designed to showcase the TV property with the highest licensing potential. An international jury (to be announced) will select a winner during the MIPCOM Junior show, to be held in Cannes Oct. 6 and 7, from a shortlist of five entrants. The winner will be offered advice on how to hit the international stores, plus receive prizes designed to establish the contestants’ global presence. For more information and to enter a submission, go to http://www.mipcomjunior.com/licensing.htm.

M&S Sales Drown in Summer Rain
Marks & Spencer reported on luke-warm trading for the first quarter (to end June) in London last week. While group sales were up by 7 percent, UK same-store sales only managed an increase of 2 percent. Of this, clothing and home was up 2.9 percent and food added just 0.7 percent. Internationally, however, sales were up by 14.8 percent during the period, with 10 store openings, including the first stores in Lithuania, Taiwan, and Ukraine.

Meanwhile, the British Retail Consortium—which represents UK retailers—reported same-store sales up 3 percent compared with June 2006. Market commentators questioned the figure, as heavy rain and flooding adversely affected trading in June. 
 
Atari to Bring Jenga to Gaming Systems
Atari Inc. will publish Jenga for Wii and Nintendo DS for November 2007. The licensor, Pokonobe Associates, is exclusively represented for interactive gaming by Dimensional Branding Group and interactive representation firm Fog Studios.  

Sanrio by Momoberry Debuts Foxy New Line
Momoberry by Sanrio created Foxy Originals for Momoberry, a new co-branded collection of jewelry via a deal with Foxy Originals. The collection of necklaces and earrings are already at the Momoberry boutique and are made from pewter and coated in gold, silver, or bronze with a matte finish.

Rocket Licensing Gains Rights to Literary Series
Rocket Licensing acquired worldwide product licensing rights to The Dangerous Book for Boys brand.  The first book in the series sold more than 750,000 hardback copies in the UK since June 2006, while the second book, The Pocket Dangerous Book for Boys—Things to Know, landed on shelves in June and is currently No. 1 on the bestseller list. The Dangerous Book for Boys contains everything from details on the solar system and famous battles, to inspiring stories of incredible courage and bravery, to learning how to race go-carts and make a bow and arrow.

NCircle Gets Word Out about New Kids’ Series
NCircle Entertainment was named exclusive home entertainment distributor for “Word World” via a multi-year North American content distribution deal with Word World LLC. The 3D CGI animated children’s series will begin airing both on PBS KIDS and on TVO (Canada) starting September 3. The series, aimed at 3- to 5-year-olds, is partially funded by the U.S. Department of Education as part of the Ready To Learn Partnership literacy initiative.
 
Execs on the Move
VIZ Media Europe appointed Pascal Bonnet as director of licensing and brand management, and Isabelle Aghina as director of TV & DVD sales and distribution.

Toys ‘R’ Us Inc. named Tori Moore Binau senior vice president, marketing for Babies ‘R’ Us.

Twentieth Century Fox Licensing & Merchandising appointed Howard Nelson vice president of worldwide promotion.

Andy Hart has been appointed licensed brands manager for Cosalt:Ballyclare.

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