Pet ownership has hit an all time high this year, with fuzzy or feathered friends currently residing in more than 69 million U.S. households. And pet owners are proving their affection through their wallets. Spending in the category has more than doubled since 1994, going from $17 billion to a projected $35.9 billion this year, and industry analysts expect the trend to continue with five to six percent increases in the foreseeable future. It’s no secret that kids get very attached to their pets, and that they also influence family purchases more than ever before. To capitalize on these two trends and grab a piece of a burgeoning market, kids licensors and licensees are getting into everything from licensed food dishes, pet treats and toys, to superhero costumes for dogs and DVDs to entice cats.

But probably the biggest oppor-tunity can be credited to pet-toting celebs like Paris Hilton and Britney Spears because dogs and cats have gone high fashion. Best known for its glittery charm bracelet and jewelry line for the tween set, Milwaukee, Wisconsin-

based The Bead Shop capitalized on the pet fashion spin in mid-2004 when it expanded its Build-a-Better-Bracelet line to include 150 different styles of collars that feature interchangeable letters and charms for personalization. Sales for the range have tripled as a result, and now the company plans to roll out 400 new SKUs by next spring, adding pet totes and pillows and expanding its range of cat products.

‘The category’s growing by leaps and bounds, it’s happening all over the world. People relate to their pets, and this is how they express it,’ says Bead Shop partner Mark Miller. ‘The days when you would walk into a pet store and see nothing but food and bowls are over; they’ve become boutiques now.’

Pet stores aren’t the only companies picking up on the fact that people are more than willing to plunk serious money down for their pets. Mass chains such as Target and department stores including Neiman Marcus and Harrods are adding pet sections with everything from food and toys, to high-end jewelry and apparel. Specialty toy chain Learning Express dipped its toe in last year and was particularly successful with craft products such as Alex Toys’ paintable ceramic pet bowl and Creativity’s customizable pet tent. The trick, says LE’s head buyer Sandie Paradiso, is finding items that fit a toy store’s mien without coming into direct competition with mass-market chains like Petco. ‘Items that let kids have fun with their cat or dog make the most sense for us,’ she says.

4Kids Entertainment CEO Al Kahn says the company had been wanting to get the pet business for some time because it’s such a truly family-friendly category. Picking up pet-themed license The Dog was a start, but it wasn’t until a change of management at the American Kennel Club opened the venerable institution up to licensing that 4Kids was able to jump in completely. ‘The amount of money consumers spend on pet products is astronomical,’ Kahn says, adding that the one gap he perceived in the market was an iconic franchise like the AKC. 4Kids now licenses around 100 SKUs under the brand, in both products for pets and pet-themed products for humans, and the company is constantly on the lookout for more. Four months ago, 4Kids added the Cat Fanciers Association to its roster and is now putting together a style guide and scoping for potential licensees.

Warner Bros. Consumer Products has been actively pursuing the pet category for about three years now, signing up licensees including The Helman Group (bowls, leashes, collars and toys), Del Monte (Scooby-Doo treats) and Rubie’s Costume Company (Superman and Batman dog costumes). Kelly Gilmore, senior VP of global toys and themed entertainment, has been hitting pet products trade shows this spring to add new licensees to the portfolio, particularly under Batman, Superman and Scooby-Doo. Cat products such as a Tweety Bird interactive cat toy from Panic Mouse have started to take off recently, she says, and WBCP will be looking to add several more cat SKUs to its line. ‘Since there are more cats than dogs in the U.S. now, cat toys are starting to be as prevalent as dog toys.’

Marvel Entertainment also threw its hat into the ring recently, echoing the sentiment that the pet arena is the ultimate family category. ABG accessories has signed on for a comprehensive line of Spider-Man items including carriers, collars, toys, beds, several types of clothing (including rainslickers and umbrellas), and tags.

Gilmore says the amount of licensed pet products on the market has doubled over the last few years, and retailers like Target and PETsMART are increasingly interested in promoting their licensed goods. But like any new category, it’s been an uphill battle to convince retailers to pony up shelf space and in-store support. ‘Part of the issue is that when these items are priced, they have to be able to compete with generic pet toys,’ Gilmore says. ‘Retailers have to educate themselves and figure out a way to bring the prices for licensed products down to a competitive level.’

Kahn agrees the industry is largely dominated by generic brands, leaving plenty of room for the licensed pet products. However, he’s reluctant to put any of 4Kids’ entertainment brands on a SKU unless it’s a very logical fit. ‘Things that are dog, cat or animal-based could certainly spill over, like Scooby-Doo treats,’ he says. ‘But in the long run, there better be a legitimate animal tie-in and not just a label slap.’

Disney is taking a similarly cautious approach to where its characters end up. While its hardline consumer products team is admittedly keeping a close eye on the growth, it’s still assessing how the category will line up with its brands. That said, the company took a step into pet foods this April with the launch of Disney’s Old’ Yeller Chunk Style Dog Food at Kroger stores across the U.S.