Market opportunities shed their Disguises

Licensee: Disguise...
March 1, 2001

Licensee: Disguise

Location: Headquartered in San Diego, California with a national sales office in New York.

Company history: Halloween costume and accessory company Disguise was founded in 1987 with Bob Pickens and Jerry Berko designing, manufacturing and wholesaling the company’s first 12 proprietary designs. In 1997, Disguise joined The César Group, an international costume and playwear group founded in France in 1842.

Product range: Growing considerably from 12 designs to over 450, Disguise now offers a wide range of accessories and masks encompassing licensed characters and the company’s own proprietary line, all designed by an in-house team.

Retail channels: Product is distributed in all channels including mass market, mid-tier, specialty, supermarkets and drug store chains.

Licensing contact: Steve Stanley, VP of licensing

Property portfolio: The Jim Henson Company’s Muppets became Disguise’s first license in 1991. A Disney master costume license followed in 1992. Disguise currently holds close to 70 licenses spanning film, television and classic character properties.

The latest: The company is expanding its teeny young adult line, and its own year-round product lines are also growing into outlicensing. Also, in-licensing is on the uptick, and a deal with Nickelodeon for Dora the Explorer costumes was inked near press time. Disguise will offer the line to mid-tier and specialty retailers only at the National Halloween Show in Chicago this month.

Licensing philosophy: In general, if a license lends itself to costumes and the property is expected to have a high level of exposure among Disguise’s consumer demos–ranging from infants to adults–then Stanley will likely pursue it. ‘There are some properties that perform absolutely great for particular categories of business, but if there is no opportunity for kids to have fun dressing up as that character, then the license is not going to perform for us,’ says Stanley.

Beyond typical licensing considerations, a property’s timing is paramount. The existing or anticipated level of brand or character awareness among kids at Halloween is a determining factor for new Disguise licenses. ‘There are many movie properties that are not released until Thanksgiving or Christmas. Those become less meaningful for our category as a seasonal product manufacturer.’ According to Stanley, it simply doesn’t make sense to release costumes the Halloween before a movie premieres since the level of consumer awareness will not exist. Conversely, by the time the next Halloween rolls around, the property is usually past the window of primary awareness.

Disguise is currently focusing on growth areas in teen/young adult licenses and a year-round line of proprietary/licensed costume sets and accessories. Stanley negotiated Disguise’s first teen license for Buffy the Vampire Slayer in November 1999, in response to a market absence of teen licensed costumes. Following the Buffy license with teen-skewing properties including Resident Evil, Space Ghost, the Blair Witch franchise and Final Fantasy, Disguise has established a foothold among this demo and will now be looking to build the category.

And with new toy division Fun 1st joining the year-round market this spring, the company expects financial growth as well. ‘Moving into a business that provides cash flow on a year-round, rather than seasonal basis is an attractive proposition,’ muses Stanley. ‘But the growth of the dress-up category and increased demand for quality dress-up toys really showed us that there’s an opportunity here.’ Stanley estimates the U.S. dress-up market at over US$1 billion annually.

With a primary target demo of kids ages two to six, the Fun 1st line focuses on dress-up for girls and role-play for boys. Fun 1st licenses include a Disney Princess line, and film properties X-Men and Zorro. Stanley is currently looking for opportunities to grow Fun 1st boys licenses, beginning with the debut of a Spider-Man role-play set concurrent with the film’s May release, and expects to make inroads with its proprietary line as well. Currently there are two sets in the line, Abby & Zoe’s Playhouse girls mix-n-match fashion outfits and accessories, and Shadow Ninjas warrior outfits and play weaponry for boys. Already, Disguise is in discussions with entertainment companies to develop ancillary media and products based on Shadow Ninjas, so outlicensing may become yet another growth area.

Licensing will continue to be a major focus, as it constitutes the majority of Disguise’s sales. The Power Rangers line, introduced in 1993, is the company’s single most successful license, with 2000 sales up 40% over 1999. Going forward, Stanley expects new preschool licenses Bob the Builder and Between the Lions to be strong in 2001.

Credit check: In licensees, Bob the Builder licensor HIT Entertainment looks for category leaders with solid distribution networks. But creativity earns bonus points, at least in the eyes of Marlene Cuesta, HIT’s director of licensing sales. ‘One of the things that really stood out [about Disguise] is that they have an in-house design team that does a phenomenal job,’ she says. In signing a costume licensee, it was important for Cuesta to find a partner that not only understood that the series vehicles are characters in their own right, but that could translate it to the costumes as well. ‘Disguise was able to do that for me, creatively,’ says Cuesta. The company’s marketing strategy for Bob was also a major selling point. ‘They’re going to be including Bob in their safety promotions for Halloween 2001, in press articles and advertising, and we consider that an important part of a partnership.’ Based on Disguise’s concepting and marketing plans thus far, Cuesta would not hesitate to award the company future HIT licenses.

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