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Worldwide retail sales of licensed goods off 1% in 2003.

Retail sales of licensed merchandise outside the U.S. and Canada were off 0.2% in 2003, as major increases in developing markets--Mainland China and Eastern Europe--and a slight bounceback in Latin America couldn't quite offset continuing problems in Japan.

Overall worldwide sales of licensed goods at retail dropped 0.7% to $107.4 billion. The largest portion of the worldwide decline was generated in the U.S./Canada region (TLL, January 6, P.1), which accounts for 66% of worldwide sales of licensed merchandise.

Though sales of licensed merchandise in most Western European countries were greater in 2003 than the year before, much of the gain was offset by continuing woes in the German economy, including high unemployment, which depressed all retail sales there. Kirk Bloomgarden of Copyright Promotions Licensing Group describes retailing in the UK--the largest market in the region for licensed goods--during the key holiday season as "buoyant." As in the U.S., there was no breakout feature film-based licensing program to give a major boost to the entertainment/character segment, but classic characters performed well in most parts of Western Europe.

One drag on sales in Western Europe is a general feeling among consumers that the advent of the Euro has brought higher prices in countries that have adopted it.

Though Japan continues to be the third largest marketplace in the world for licensed merchandise, the country's economic stagnation is dragging down sales of licensed goods. Most of the bright spots in Japan revolved around sports.

Disney's Andy Mooney says the company's business grew last year in Japan, partly due to the opening of a second theme park there.

The picture is brighter elsewhere in Asia. As multinational retailers continue their rapid expansion in China, sales of legitimately licensed retail products are growing at a double-digit pace. Warner Bros. Consumer Products' Mark Matheny notes that the SARS epidemic depressed all business in China and Hong Kong in the early and middle parts of the year, but that retail sales rebounded by the end of the year. "Within Hong Kong, retailing was down 50% for a while, but it really bounced back" to nearly hit the company's initial growth projections, he says.

Most observers with whom we speak say business is "stable" in Southeast Asia and in Australia and New Zealand.

In Latin America, business is generally up in Brazil and Mexico, and moved slightly ahead in 2003 in Argentina, following the economic meltdown of 2002. Warner's Matheny notes that business in most Latin American countries rose in 2003 in local currencies, but not necessarily in dollar terms.
(In millions of U.S. dollars)

Territory                    2003       2002    % change   % of total

U.S./Canada                $70,800    $71,500      -1%        65.9%
Western Europe             $24,150    $24,000       1%        22.5%
Japan                       $8,025     $8,500      -6%         7.5%
Australia/New Zealand       $1,675     $1,650       2%         1.6%
Latin America                 $825       $775      -6%         0.8%
Southeast Asia                $650       $625       4%         0.6%
  (including Hong Kong)
China                         $925       $800      16%         0.9%
Eastern Europe                $140       $125      12%         0.1%
Other                         $200       $200       0%         0.2%
TOTAL                     $107,390   $108,175      -1%

"Other" includes India, Middle East, South Africa.
% of total may not equal 100% due to rounding.

Source: THE LICENSING LETTER. [C]Copyright 2004 EPM
Communications, Inc.
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Comment:Worldwide retail sales of licensed goods off 1% in 2003.
Publication:Licensing Letter
Article Type:Industry Overview
Geographic Code:1USA
Date:Jan 19, 2004
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