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Boola Moolah
From T-shirts to dress
shirts, from New Haven to Seoul, Yale seeks to cash in on product licensing
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Business New Haven
1/26/1998
By: Susan Banfield
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They are a familiar sight to any New Havener, no matter what his or her alma mater may be: T-shirts, key-chains, beer steins - even babies' bibs - all emblazoned with the Yale name in that distinctive blue.
Until recently, the university paid scant attention to such products, and was only minimally involved with their development and marketing. Neither did it think much of them as a source of revenue: Yale even exempted New Haven merchants from the standard seven-percent licensing fee when selling products bearing its name.
Meanwhile, other universities took their licensing seriously, and made big money from it. Harvard was raking in $1.5 million a year; UCLA even more. These schools marketed items not just to students, alumni and their families, but to buyers overseas who had no connection with these universities beyond their imaginations.
“Two years ago Yale decided to pay more attention, be more involved with the process,” explains Helen Kauder, who oversees Yale's licensing program.. The first step Kauder took was to work at upgrading the product line.
“Not a lot of attention had been paid to what was produced,” she says. “There was a lot of stuff out there not really consistent with our image. There are lots of companies who use college logos and slap them on just about anything.”
Yale forced discontinuation of some products, such as magnets or key chains, “because the designs were unattractive or they were of poor quality.” In their place, Kauder has worked to introduce more desirable items. She has made university archives available to manufacturers as a source of new product ideas. One is a reproduction of the Yale baseball cap worn by George Bush, class of '48.
Another major change in the university's licensing program was the decision, effected last April, to bring to a close the royalty exemption for New Haven merchants. Kauder compared the prices of Yale items sold in New Haven with those of comparable items sold in other cities and found “there was no difference in price.” Since merchants elsewhere apparently were able to thrive charging these prices and paying licensing fees, Yale decided to take its standard seven-percent cut.
Kauder claims merchants “have been very receptive” to the change. Harry Berkowitz, president of the Yale Co-op, backs up her claim. “It has not caused any dislocation in our business,” he says. The Co-op coped with the change by raising prices on some items, eating the fee on others, and where the store had long-standing relationships with suppliers, “Each of us gave a little bit.”
According to Berkowitz, sales of licensed products have continued strong. “It is a very powerful name for alums and for people who come to New Haven - and that's worldwide. We do a very big mail-order business; it draws very widely from all over the world.” As an example, he says that “The phones rang off the walls the last two weeks with all the kids accepted for early admission.”
In addition to being a steady source of income for the Co-op, Yale licensed products also keep such stores as the Boola Boola Shop, Campus Clothing and Cronies in business. And of course, Yale is now also sharing in the profits. While Kauder declines to say just how much the university made in the last year, she notes that she “is looking to achieve a seven-figure income.”
Having jump-started the university's domestic licensing program, Kauder is now attempting to follow in the footsteps of Harvard and enter the Asian market. Yale's aim in this venture, she says, is both to “enhance our image overseas, and also to protect ourselves.”
Kauder says there are a number of reasons why the move is a sound one. “We have a wonderfully strong name overseas; we're extraordinarily respected,” she says. Also, “Alums have taken on important roles in these countries.” Perhaps most important, “That American look and style is very sought after.”
Korea is the first market Yale seeks to enter. “In Korea,” Kauder says, “by virtue of our alumni base we're ahead of Harvard. Our name is extraordinarily well respected there.”
The university has established a relationship with a Korean company that will sell apparel, accessories and stationery inspired by “the American collegiate look.” The items will be “more upscale than what you see here - business clothes, for example,” says Kauder. The new line is expected to be in Korean stores in a few months.
Japan, Yale's next Asian target market, will be a harder nut to crack. Kauder concedes that Harvard has had a larger impact on society there - principally because of its business school. It has also been said that the American collegiate look is on its way out in Japan, as the grunge and hip-hop movements gain in fashion influence. Still, Kauder finds plenty of reasons to expect success.
“Yale's name is still very well respected there,” she says. As for the position that the popularity of the American collegiate look is fading: “I disagree with that perspective. Look at the success of Gucci, Ferragamo, Calvin Klein in those markets.” She also notes that, with the current financial crisis in Japan, people who can no longer afford the most exclusive labels will view Yale products as carrying a traditional, upscale image, but in a more affordable price range. Currently Yale is negotiating with a number of Japanese firms for the production and marketing of a Yale line of products.
Will Yale succeed in turning upscale Asian apparel items bearing its name into significant money-makers for the university? Kauder is optimistic. Others have their doubts. “Harvard is a primary name [abroad]; Princeton is a secondary name,” notes Harry Berkowitz. “It is yet to be proven whether Yale is a primary name.” Perhaps only time will tell.
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