Latest / The Licensing Exchange / From Garage to Global: Cindy Levitt on Building Hot Topic and the Evolution of Licensing

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From Garage to Global: Cindy Levitt on Building Hot Topic and the Evolution of Licensing · The Licensing Exchange

• Announcer: You're listening to the Licensing Exchange, part of the Look Legal pods from the law firm Nolan Heimann lawyers for creative business makers. And now, here are your hosts, attorneys David Schneider and Greg Pan. David Schnider: Today on the show we have Cindy Levitt. Cindy has had a number of roles in the industry, including having been the Senior Vice President and Chief Merchant for Hot Topic and the Senior Vice President at Licensing, Mad Engine Global. She was a board member and a chair of the board for Licensing International and was inducted into the Licensing International Hall of Fame in 2023. Cindy, welcome to the show. Cindy Levitt: Thank you. Thank you. Glad to be here. David Schnider: So I want to start with a question I ask all of our guests, which is, how did you get into licensing? Cindy Levitt: So like everybody else didn't know what licensing was in the very, very beginning and I really started through fashion and became a buyer. I knew I wanted to be a buyer since I was a teenager because I grew up very poor and didn't have any money and I couldn't believe that I could work in retail and people would pay me to work with clothes. So I started in the retail path and worked at the local mall by my house in Southern California and worked my way up to be a buyer at the May Company and then moved to North Hollywood to the corporate offices, downtown LA, then North Hollywood. I wasn't really into licensing then, but I started buying very pop culture accessories for the May Company. But they were all just influenced by, and the big claim to fame was the Madonna look, because this was in the early 80s. And there wasn't licensed Madonna out there, but you could go and buy the big bows and the pearl necklaces and the crosses. And so I started bringing all that in. Then I started really getting turned on to this pop culture influence of buying and getting the product in stores. And then from there, I answered an ad in the LA Times, and it was in Women's Wear Daily for a accessory buyer for a hip company. And at the time, the May company was very corporate and they were restrictive on what they wanted you to buy. And so I followed this new path for a company that had no stores. And it was the beginning of Hot Topic. And I took the job as a buyer with this promise of, could buy anything I want that was young men's women's accessories. But it was called Hot Topic because we were influenced by anything hot. And so that was like my dream job. I started in May of 89, and we opened our first two stores in the fall of October 89 in Southern California. And my first office was in the back of Orv Madden's guest house garage. The garage held the product as it came in and we ticketed it in the garage, sitting on the garage floor. And my office was on a picnic table in his guest house and he sat there with me and his wife, she would come and help with ticket things and that. Cindy Levitt: That was the three of us. And we opened the first two stores in, as I said, 1989. So at the time, it was all just accessories. And then from there, it wasn't doing well when we opened the first two stores. But I had this one little section that was influenced by my time living in London. When I was 19, I moved to London for a work abroad experience. Coming from Orange County, California, I had, you know, not seen a lot of anything and then moved to London and also was able to go to like all these new age shows, new wave shows. It was a little post-punk, but the punk influence was still very heavy. The ska influence was heavy. And I just fell in love with all this pop culture of what I was seeing in London that I didn't see in Southern California. So when I came back, I got a job at the May Company and then I still had this love of alternative music. And then when Orv hired me, I bought this one section that was leather, leather bracelets and chokers and crucifixes and skulls and daggers and lightning bolts. And that one section kept selling, but that all the other nice handbags and sunglasses that were, they were cool. It was very young men and young women's kind of like a Contempo casuals vibe, you know, back in the day. And, but that it was terrible. And so six months into our first store, two stores opening, Orv said, we're going to not make it at all. So we have to change. have to pivot. I don't know if we use the word pivot then it was like, we have to change or die. So we, he's like, let's get on a plane and we went and visited all the hip alternative stores in the downtown area of different cities, like Zipperhead in Philadelphia and Trash in Vaudeville in New York and Thrash in San Bernardino. And there was some in San Diego and Huntington Beach and Seattle. And then we decided to flip our whole concept into that section that was selling like crazy. And it kept getting, so we did, we took out everything else, sold it off and then started expanding what would be known and become the goth store of Hot Topic. And we didn't carry music at the time or music tees. We didn't carry apparel. It was all accessories. But you ask how I got into licensing, the first thing that happened, and our first step into licensing is we were starting to get customers asking us for rock tees And that was the first time I had to try to figure out how to buy something that was truly licensed. And at the time, back in 1989, you couldn't find a rock tee in a store. Nowadays, everyone sees it at Target and Walmart and any store and there was zero. You had to be at a concert. There was Grateful Dead sometimes at head shops, what we called head shops back then, but there was nothing else. So had to figure out who did the tours, how to buy it, and we ended up bringing in Rock Teas and that brought six of them in. And from then, I started realizing what licensing was. And then we started buying more more and more rock tees and the six turned into the whole rock tee wall because that's what was blowing out and then from there because at Hot Topic we had a policy ⁓ that all the store managers could communicate with the corporate office and at the time we were pretty small so it wasn't too hard but they all we wanted them to give us input of what people are asking for what are they asking for and the first non-music licensed product that we bought was from In Living Color and it was Homey the Clown, because people were loving Homey the Clown back in, that must've been like 91, I think. And so we found out where to buy Homey the Clown, put it out on just like a little tee stand of a fixture and it blew out and it blew out. so then we started, next was Twin Peaks. That was big. So we got, Twin Peaks and bought Twin Peaks. And then that's what kind of started as a buyer, I was trying to figure out where do I find this product because it wasn't that available back then. Then what put us on the map of true licensing where we really went and met with a studio was SpongeBob. We flew to New York and we got ahold of someone at Nickelodeon. There's someone in our industry a lot of people will know which was Karen Samnick, who was kind of a young executive at the time and she was like, oh my God, let's talk. So we went up to the Nickelodeon offices and we were very Hot Topic looking back in the day and they were kind of like blown away like, what do you wanna talk to us about? And I think at the time we had, that was end of 99, we probably had enough of a handful of stores, probably about 50 or 60 stores. No, by then we had a lot more, under 100. And we said, we're kidding, our store managers are asking us to get SpongeBob shirts and SpongeBob had just come out and they're like this is a kids' property this is not for adults or teenagers we don't think we want it in your kind of dark and gloomy and goth stores so so you know what why does this make sense and what we found out was there was a lot of colleges had SpongeBob watch parties in the dorms and they had a drinking game so whenever Patrick or Squidward or SpongeBob there was all these secret words whenever some said these words they would all drink and so they wanted to start wearing the product and so we brought it in and we locked in a I think it's about a nine month to a year exclusive because no one even heard of it at the time and it became the biggest thing ever and it really stepped us out of our goth and dark look of Hot Topic but also it kind of put us on the map not only with customers of, this is where you go to find something hot, but then it put us on the map with licensors who all of a sudden thought, if it's in Hot Topic, it's going to be hugely popular because after Hot Topic started carrying SpongeBob, then everyone else wanted it. So everybody's then started coming to us as, please carry this in your store because then our little main Target wants it. Walmart wants it, you know, many other retailers. So that's kind how we started. And then we just then kind of like we had to go and pursue a lot of the licenses. And we didn't know how to do it back in the day. But then people started coming to us and then we were invited to studios and invited to lot of the summits, which we were not at all in the very beginning. So it really us bringing in SpongeBob changed everything. So that's how I got into licensing. David Schnider: Yeah. That's a good answer. It makes me realize I should have shopped at Hot Topic more when I was that age. going back, so one of the things you talked about was I know that you were, I think, the first employee at Hot Topic and you were working out of the garage. It's pretty amazing to think about that given what a massive retailer it is now. What was like and how did you guys make that transition from a garage to hundreds of retail stores? Cindy Levitt: It's a great story. So at the time when I took the job, because I was a department store buyer going to New York and having what I thought was a very glamorous life for me coming out of Costa Mesa, California and going to New York every month. But I was getting so frustrated that I couldn't really be creative. So when I first took that job, it was a big leap. And there was venture capital funding at the time. And Orv Madden, is the founder, he had come from Broadway stores, or the parent company, he had opened the first Children's Place and Accessories Place stores. So he had a background on how to open stores, and I had a background in buying. Within the first two stores opening within the first six months, our funding fell out. It disappeared because of some other investment they were in. So all of a sudden it was just Orv and I. And we had stores open, but they weren't doing enough to kind of keep us afloat. So Orv and I had to start running the stores at night. We would be the merchant and the executive. He did mostly the finance and operations. And we would work in the in the his back office house garage thing and then we moved to the back of our first store in Montclair. And so we then I worked at night in a store being a store manager and he did the other store and we switched up. So then we had to actively try to get financing and funding. And at one point, Orv I know second mortgaged to his home to help us make payroll, but we actively had to do like a lot of presentations to get us up to get some money. So we got a little bit of VC money and we got us up to about eight stores. And then that money led to a round by Bank of America that got us to I think 16 or you know it's like every year it was like two stores four stores it took a long time we started in 89 with two stores and I don't think we felt comfortable where we could take a day off until probably 1993 where we started getting some rounds of funding and so it was a lot of it was a lot of bank and VC funding in the beginning and investors and we had to deal with them and wanting to see returns right away. But it was kind of a magical time, but we didn't know if we were gonna make it for so many months and even the years. Orv and I didn't take any time off, we had no vacations, we were making bare minimums to just keep it going. And then we got some major funding in the early, probably around 94. And then we were able to start opening stores at a clip. And so also, Orv and I had to go out and try to find store locations. This is before we had a VP of real estate. And we had to go out to all the malls. And we started in the worst malls because no one wanted an unheard of company. And nobody wanted someone that looked so dark and ominous. So we had to go into locations. Like our first locations were Montclair and Westminster, California, Victorville, California, Lakewood, California. El Cajon, California, Chula Vista, Fresno. And then we started going east and going to a lot of New Jersey stores also and Seattle. Seattle was more welcoming, that there were certain mall developers that wanted nothing to do with us and especially the real high A level malls. So it took a lot of time, but in 96 we went public. And I think at that point we had 160 stores maybe. And then once we went public then, and then we had so much press and we had so much licensed product, but it was still a struggle for many years with mall developers. At one point, Simon Malls wanted to kick us out because they thought we were attracting a bad crowd. There was rumors that we were piercing in the back rooms, that we were bloodletting. And there was a mall in Mid Rivers, Missouri, which is a suburb of St. Louis that our CEO at the time, Betsy McLaughlin had to go and meet with the alderman, like city councilman of that suburb to walk them through and say, we don't have any foul language. We don't have any drug paraphernalia. We don't have any anti religious product. We are clean as clean can be. We don't do bloodletting. And so it took a long time. It was always a struggle until the rest of the world started carrying that product and then everything changed too. David Schnider: So Cindy, the story you told kind of reminds me of a quote I heard from the woman who founded Spanx. Someone asked her, how did you become an overnight success? And she said, 10 years of hard work. Sounds like a very similar story. I was curious though, how did you develop sort of the signature look and feel of Hot Topic? Cindy Levitt: It was very organic and as I said earlier, it started out with a four foot section of this dark gothy stuff that was reminiscent of my time in London, where I was kind of dressing. I wasn't completely dressed like that, but I was wearing parts of it. And I came back here and saw there was nothing like that at all. And it's hard for people to remember because you can buy, you know, studded bracelet at Claire's right now or any kind of, you know, even a Five Belowish kind of place, but it didn't exist. So it was my love of music, my love of fashion from London that brought us this section that did well. And as we kept expanding it, we started hiring people with that look and feel because people that probably couldn't get jobs in a normal retail or fast food environment, people that were pierced and tattooed. And I credit our store and associates and our store managers for really evolving that as well. Like they were so important to us. They would bring us the information. We listened to everything they said. They were on the front lines. They were the they were consumers. They were passionate about music and pop culture. And as they we started hiring those people that loved it, more and more people started coming in that had that look. And we were really a safe harbor and sanctuary for these kind of misfits and weirdos of teenagers. And as I said, we were very parent friendly because we all came from backgrounds that we knew that what the customer service looks like. we wanted parents to feel comfortable. But there was this allure and mystique of Hot Topic that people were afraid to go in. But people were really welcomed when they did come in. But I'd say it was the employees that organically grew this look to be what it is. And it probably still does today, too. You know, they know what they want. They're passionate about what they like, and they passed it on to us as the merchants. And then we started changing what that looked like in the stores, too. And, you know, we went through a store, you know, different kind of, well, the first sign and logo of the first couple of stores was a neon green like Hot Topic in a lightning bolt. But that was very short-lived and then we got all dark and gothy and then we had gates, know, the big scary gates and then we even had a couple years of store design where we had bugs and resin in all the gates and you know, then we put a lot, you know, you buy a lot of skulls you start having a different look. And so it kind of devolved but I credit our amazing employees that I you know there's so many people from back then that still work there and we're all kind of this big family and we'd love to reminisce about you know how it all started and who was in you know who was there remembering all these fun things so it was very employee driven company. Greg Pan: Yeah, it's great to hear that a lot of the trend setting and the trend identification was done at an employee level. You mobilize the people you have on hand, you let them listen to customers and share what they think is up and coming. But as you know, as Hot Topic started to more power in the industry, that's where licensors and brands and designers and manufacturers are trying to pitch to you. So I'm also wondering, how did brands that you might not have been familiar with? How do they make a persuasive pitch to Hot Topic? And if you happen to have any particular example that you remember. Cindy Levitt: Well, mean, we were back in the early days, probably less, they were pitching to us, but we really knew what our customer was. It wasn't like we were bringing in all the latest, you know, shows and upcoming films and stuff. We really knew what we wanted. But there was just some things that were, we just got it when they pitched it. I mean, some examples are, Invader Zim. Nobody knew what that was at Nickelodeon. But when we saw it and our staff saw it, we were like, my God, this is amazing. And it was never that big out there in the world. But it was huge for Hot Topic because we just, we would listen to pitches. I'm trying to think if there was something that was really, I would say it's Happy Bunny back in the day where it didn't look like it was really hot for Hot Topic. It was bright and colorful and stuff. when you kind of look deep out into it. It was very sarcastic and dark. So I would say the challenge got as Hot Topic grew to a much bigger company. You you listen to pitches from everybody and you're like, you can't take them all in and not everything's right. we really kind of had to stand her ground that just because it's in Hot Topic doesn't mean it's going to be big. So it got harder and harder as we got bigger. But I think still just staying true to who your customer is was the key of success then and now too, but sometimes she gives someone a chance and I'm to think if there's anything that I had that was, mean, SpongeBob was a very weird thing, but we went after it ourselves. ⁓ You know, things, I would say another one that was interesting to me was Powerpuff Girls. It wasn't really our demographic at the time. But for some reason, we listened to it and it was just seemed so interesting that we gave it a try and it was a huge success. So it didn't always have to be dark and gloomy. It could be just like something that our customer related to. I think some of our misses when we try to do things that we didn't, that weren't really customer up was for some of our fashion in the early days where we thought we were getting very cool and it's like, know, raves were in. So we thought for back to school, we do this kind of alien school girl that was all shiny school dresses and it bombed. And, you know, there are some of them, you know, I love ska music. So I want to do this whole mod thing, like, you know, at certain time, but like, you know, whole fashion collection, because we did start carrying fashion in the mid 90s. And it bombed because our customer doesn't understand that era. And so it's I think it was harder when we would try to do something that our customers didn't understand. So we always try to make sure our customers would get it when we listen to pitches. Is it odd enough? Is it unique enough? it not? It was very important that it wasn't everywhere back in the day. But we would listen to everybody. And that's one of the things I think the buyers I always believed is you always listen to everybody because you never know where your next big hit will come from. And we had some crazy big hits on things like big wide leg jeans with glow stick pockets. That doesn't seem like a Hot Topic at all, but we listened to somebody. We knew that the rave thing was happening. We listened to our customers and our employees that were like, they don't know what to do with their glow sticks when they're dancing. And so we went to one of the wide leg gene manufacturers and we worked together on it but it was like still organic. But there's plenty of pitches as we got bigger and you know even I have experienced in both my roles that you just can't make it happen just because it it's being released. It has to be organic, it has to have content, it has to have a backstory. There's so many times where this is, in licensing I always thought this was interesting because being the dark and gothy store, so many people had these characters they would create or these like little comics or little cutesy dark dolls and stuff. And it's like, if we don't know the backstory and the customer doesn't know what it is, it's not necessarily gonna work. So we always had to tell everybody you need a backstory, you need content. Greg Pan: Right. I think the fun part of licensing is that you can't always predict what is going to be like a groundbreaking cultural sensation like this. Like this year is about like the Labubus and K-pop Demon Hunters which came out of nowhere and no one predicted it. I wouldn't say they came out of nowhere. There was a lot of preparation behind it, but it wasn't, it wasn't on anyone's top 10 list radar of like breakout brands this year. Some. Cindy Levitt: Yeah, it was probably never pitched to anybody. Everyone was gunning to go and find it. Greg Pan: Right. I'm wondering, like, if you recall any brands that you thought that there would be huge, that would fit really well with your retail identification and your customers that didn't really go where you thought it would go. Cindy Levitt: Yeah, the one that I feel like I took responsibility for is the brand Pony, which was happening back in the of the rave hip hop early 2000s. I think it was early 2000s. Yeah, it was like, you know, when all this old adidas was coming back and everything. So we thought we had the opportunity to do Pony because it had been not around. Cindy Levitt: It started in the 70s, kind of made a little comeback in the mid 80s, but it had been extinct. So we brought it back in a major way. We had to invest in a major way. And we did a big collection, a lot of apparel manufacturing, and it bombed big time. And we just thought we were wrong. And we thought that we could predict what was going to happen, but they just didn't know what it is. Trying to think of some other things that. Cindy Levitt: We did this one collection that we had very successful cut and sew collections that came much later in the Hot Topic era where our traditional licensees couldn't really produce corseted dresses and coats and things like that. that's when we started doing direct to retail deals. And we had some extremely, extremely successful ones, but there was this one where we decided to do DC characters in prom dresses, you know, and they wanted nothing to do with it. It didn't work. It was too much of a leap. So there are some misses. But you know what? When you ask me, was there things that got pitched that we bombed with, there always is when you're that type of company, but we never bought so much that it hurt us. there'd be a lot of, know, random animation is sometimes hard. Much later in the, you know, in the streaming, a lot of streaming shows just come and go so fast and they don't have content, they don't have assets. So it got harder, but it's really not, there was never that big of an investment for something. You just move on. And that's what Hot Topic did the best was you get it, you get in, you get out, you have it first, and you don't, you know, we were encouraged everybody to make mistakes and to break the rules and to have some failures. Else you're gonna be too gun-shy to do, find the next big thing. And that's what they were really good at. Greg Pan: Yeah. You were talking about the DC corsets, the adapted products. I often see there are differences between licensed products that are literal interpretations of characters, as opposed to more creative uses where they're adapted into something more original, something that wasn't featured in whatever program they were in. Do you find that one is more exciting and more successful than the other? In the early days, felt like if you could emulate something that was looked like it was, you know, something that was worn or if it was, let me back up. If you could see it, that it was worn in a film, there was a lot of slam dunks with that. There was the Vote for Pedro t-shirt. That was one of the best things ever that we did. The Black Sabbath shirt was in Iron Man. Those are the kind of things that the exact thing is very popular. There was some, we did Outlander, which is one of the biggest successes that I'm so thrilled with that did not seem like a Hot Topic property, where we took the Frasier plaid that was the plaid that actually exists for that family. And we did some coats and her nightgown. And that did great. But then really where it's evolved to today, interpretation and you know her universe there's so many interpretations and it's a much easier I think it's easier to wear it it's not so costumey it's more bounding like Disney bounding or and it's more you know that I think you know bounding, yeah. Cindy Levitt: Derek Baca and Liz DeSilva now have a company that has, they're starting to really do a lot with that, with this kind of just inspired by. So I think the inspired by it is where it's at now and it's just a lot easier to wear than the actual costume we look. So both were good, but I feel like it's more the inspired by now. Greg Pan: So, on another area, Hot Topic is well known for spinning off two retailers, very successful in its own right, Torrid and Box Lunch Can you talk a little about that story? Because it's one thing to take a really well-known brand and then spin off new stores that kind of go in a different direction of the new brand name. And what was the reasoning behind that and how did that come about? Cindy Levitt: And Torrid is a fantastic story, was once again came out of our employees. This is back in the late 90s where a lot of our employees were saying, we love this store and we were starting to carry more and more fashion, but we had very limited space. As you know, Hot Topic stores are densely, especially back in the day, were densely merchandised, which is part of its magic, but it didn't allow a lot of breadth of skew count for apparel. So our employees said, I can't wear the fashion. How do we even, this is not fair to us. So we've tried bringing in plus sizes with our fashion we were bringing in, but in a store that is not an apparel store, when it's that small, instead of buying like a small through an XL or a zero through a 13, you now have a lot more sizes. So your skew count becomes, the unit count becomes much higher. And that just takes up so much space. And also when you don't do well with it, it's a lot bigger risk. So we tried and tried, it didn't work. The clothes were falling on the ground. We didn't have the right hangers. was just, we weren't doing it right. Orv Madden, the founder decided we need to create a plus size chain. There's really at the time only Lane Bryant and Catherine's out there. So we brought this hip, cool plus size store. The first one opened in 2001 and it was a little more Hot Topic-esque, a lot more Hot Topic-esque than it is now. It has evolved into just a contemporary fashion chain. But it was the first time that younger girls could find clothes that were not, you know, at the time in 2001, plus size clothes were not cute. They were very matronly. They're built to cover you up. They were kind of the same skews for your mother or grandmother or teenagers. So this is the first time it was really catering to a teenage customer and a young adult. And we would have people coming in crying and mothers crying. It was the most emotional thing we've ever done trying to give these young girls a place where they could buy cool clothes and and then you know it kind of really developed into its like at the time that we were all when it was new, the same merchants and we hired a couple extra merchants, but it was very close one company and then as it grew, it became its own company. And then it's evolved to the company it is today. And it's done amazing things with plus sizes and really, back in those days, even like the big major retailers carried a little tiny bit of plus sizes, but then they all started doing it and make it more hip and young. So it was really trend setting and I'm very proud of what we did with it and then Box Lunch started in first store that was 2013. And that became that we realized that people that are older, over 30 is older, can't shake their head about, the image in their head, that Hot Topic is for teenagers and it's a goth store. Even though they had not crossed the threshold of a Hot Topic in years, they remember it from their dark youth or their 90s emo or the emo thing in the 2000s, they don't really remember or know that it had become very big in anime and collectibles. And the goth section was very small and it was a lot of everything else. And so we just kind of, we're doing a lot of marketing campaigns to try to get customers back in that were over 30. And we decided, we just couldn't get them there. So we decided to create a more elevated, more collectible, more Disney focused, brighter, lighter, older pop culture store. And it did fantastic. And we started with the Give Back campaign with Feed America. it's been an amazing success story right out of the gate. And what they've done with it since then is great. I always say, you don't often hear of companies that do well right when they open. And it served a good purpose. People didn't realize they were related they do now, but not in the beginning. So it's a great story and it has a very, very different look and feel with different merchant teams and they've done a fantastic job. David Schnider: So eventually you left Hot Topic and you went to Mad Engine, who I believe is a major licensee, right? A different kind of company. What was that like for you? Because that's a big switch. Cindy Levitt: Yes. It was a big switch. First of all, Mad Engine was a great vendor to Hot Topic. So when I left, I started, they had just lost their SVP of licensing, so I took its place. it was, they were just a company that I knew them, I was comfortable going to, and they really wanted to expand a lot of their licensing. They were very heavy from the get-go in Marvel. They were one of the biggest and first Marvel licensees. Very big with Disney, a lot of the big heavy hitters. They have a tremendous amount of licenses, very much studio-driven licenses. And then when I came in, we were trying to get more of the niche licenses and it was a great experience. It was an eye opening experience because coming from a retailer that was very popular and then going to a licensee was, I had a big shock as a, you know, as in my job where you are treated very differently. And even though you were close with everybody, you know, when I was a retailer and I still, you know, relationships in our industry are everything. And there's so many amazing people in our industry, but you are treated different as a licensee. And it was really hard for me in the beginning. It was, was, it was difficult. And I think a lot of retailers when they cross over to the licensee side is it is hard for them because you're just, it's not the glamour of retail. Retail is not glamour because you have awful hours compared to licensors and licensees, but you're treated differently. I hate to see that, but it was really a hard, hard thing for me. Then we also saw, it's funny when you turn that licensors or mainly licensors when they came into retail and when you cross over into retail, they have a hard time too because they're not used to everything, your hair is on fire. Greg Pan: Yeah. Cindy Levitt: It's it's go go go and you're changing ad campaigns and you're changing this and that every day. It's like you can't just leave at five o'clock and you know, you're not working six nine year out. You're working, you know, tomorrow. You're working out, you know, trying to figure out tomorrow, trying to figure out three months. So they've had a hard time, too. But it was a shock going to licensee. Mad Engine was a great company. They're very, you know, it was really good educational for me because they were so big with Wal-Mart and Target and and Kohl's and Ross. So it gave me a really interesting perspective on working outside of specialty. I had really a department store and specialty mentality. So it was very, very different. When I started there shortly after, we went into the pandemic, changed everything. And then went into got bought by private equity and then merged with Fifth Sun. So it was like, there were a lot of operational things that made me a stronger person because it wasn't just all the things I knew about searching for the next license and customer service and all that. It was like a very operational job and pandemic was just a very tough time for everybody. But I think with the licensors and licensees, was challenging. David Schnider: When you talk about the difference between a specialty retailer and a Target and a Walmart, what kind of stood out to you as being the key differences that you saw, at least for licensed product? Cindy Levitt: I felt that, one, I got a sense of, we thought we were so hot at Hot Topic when we said, we're going to buy 3,000 or 4,000 of something. Then I saw what a Walmart order is and I'm like, oh my God. I was like, whoa. But I realized that you had when you, you know, our sales team, which are fantastic at Mad Engine, they couldn't go and pitch a million things to these, these buyers. had a half hour to hour slot every, you quarter or six weeks or whatever. And they had to be limited. So bringing in all these licenses, they just couldn't show everything. And that was hard on licensors because licensors are like, what did Target say? What did Walmart say? And that you didn't get shown because it wasn't in the theme of what they wanted to see in that particular, you know, setting. And when you have some oddball licenses for as a Marvel or Disney or Universal product. Big box people tend to go with the safer bets. They're less willing to take risks. I also found out that they're not necessarily pop culture buyers, merchants. are, you know, of course there are some, but they, you had to really, our sales team had to really pitch and so did the licensor. They didn't have their finger on the pulse of the next kids cartoon or what the next like Bluey was or next, you know, deep into Marvel and Star Wars, you know, streaming just bring them your best stuff and you help them decide. So it was different in that way because I was like, oh my God, these buyers don't know some of this product and they don't know what some of these properties. And that was shocking. So I realized how great Hot Topic was and some other specialty guys where they really, really hire merchants that know their stuff versus the big box guys that, you know, it's just skew count. And I realized also in big box, how important their planners are with them. Their planners are very important and they are now. I think with almost everybody, but it was, it was very interesting to learn what, you know, and then the timing, cause they're, they worked so, so, so far out compared to what I was used to as well. Greg Pan: Did you find when you changed from being a retailer to a licensee, that was easier being a licensee? Cindy Levitt: No. Greg Pan: Hahaha! Cindy Levitt: First of all, you start working with licensors. They don't know who you are. They just know you're in the voice on the other end of the phone or the Zoom. They don't understand a lot of them how retail works and they don't care. And so it's just like, and it's all about, I want a placement report, I want a forecast, want a, you re-forecast. It's like, it's not like talking about the properties with them and what, you know, could emerge them, the characters are, and there's, you know, you have some people that pitch that part of it, but the day-to-day was so hard because it was just about logistics and not about the passion of it. But I just felt like you were treated as if you were an employee for a licensor and not a partner. And that was really disturbing to me, to be very honest. I just felt like it was, I didn't see the partnership you had with the, that a licensor has with the retailer. It was just like, what have you done for me lately? And this is what I want. And I don't care if, you know, I don't care if you're in the middle of the licensing expo, our forecast is still due, you know? So it was, it was really challenging and it became so finance driven, you know, I mentioned it in my Hall of Fame speech that one of the things I wanted to really get across is back in the day, I think there was so much success with licensing because you really partnered with licensors and licensees and retailers partnered to see if they could nurture a license, see if they could have it go out to a smaller company, let it brew and nurture and marinate and then take it out. But it got so prohibited towards the end of before I retired where it's just, all about how many people they can license it to, how many retailers they can get it to, not letting it something breathe and happen, and all about just very big guarantees that made no sense. And it just became finance, finance, finance. And I felt like that has hurt our industry and taken a lot of the magic out of what we do well. I mean, that's the thing when you see a Labubu come up. David Schnider: Thanks. That's what licensing's all about. That's what makes it fun. It's not about how much money you can put up for something that might come out and die right away. And by the way, the licensee's on the hook for all of it. so I felt it was a really tough, tough, licensees have a lot of grit. and they have to take risks, but they also have a lot of liability that comes with that risk. So it's a hard, hard place to be. Like I feel like a licensor can go home at the end of the day and not worry if something did well, but a licensee can't. They got to sweat it out to the end. Greg Pan: Yeah, I've had that conversation with our clients who are licensees who after sometimes, you know, when they get a brand they really love, they get the brand because they're fans of it too. And I just often have that conversation with them like the license or they'll support you up to a certain point, but they're never going to love you back the same way that you love them. Cindy Levitt: No, no, and I think it could be so much better. I felt like they're towards the end and probably one reason why I choose to retire a little younger than I should have was ⁓ that it became so one-sided. became, I felt like my the quote of my finance team won't accept that. My finance team won't like that. Who's your finance team? Can we talk to them? No. That was the negotiation towards the end. It took the love and magic out of our industry. I feel like it could come back to it again with interesting. David Schnider: Yeah. Cindy Levitt: You know, people taking a chance on something and it grows and it's not hurting the licensee. The licensees often get so hurt between audits, you know, missed guarantees. It's all the risk is there. And it's it's I don't think it's right. Greg Pan: Yeah, you definitely came through an era where it very, very relationship driven, where in the past 10 years or so, it's become much more numbers driven. And who knows when they start implementing AI in their financing model, if it's going to be even more numbers driven. Can you talk a little more about what do you think the industry is going to lose by having it more focused on just pure dollars and analytics? Cindy Levitt: I think they're gonna lose, everyone's gonna be, play things very safe. They're gonna just go after the big slam dunks and it's gonna be, you a lot of repeat and sequels and you're not gonna get a Labubu and you're not gonna get a Studio Ghibli and you're not gonna get a Napoleon Dynamite or you're not gonna, you like to me one of the best licenses out there right now is Wednesday Adams and it's so creative and you know the first year, the first season it came out I really felt like they were good partners. They were really good. They didn't know what they had. But they let it, they were an example of, you I have retired since the second season, you know, came out, so I'm not sure how tough it was after that. But that was a great example of let's work together. This is the coolest property, but not everyone knew it was gonna be good. So I just feel like you're gonna miss a lot of Wednesdays, you know, a lot of. Stranger Things you no one knew how big that was gonna be it was you know the hardest thing in the beginning of that was they didn't have assets But they were great in the beginning to work with on that because they just didn't know what they had. So it's almost like these things that catch you by surprise though. They're willing to work on those a little bit more hopefully but there needs to be more of those and they, can't, I just feel like if, you know, it's just finance, people are gonna be afraid to take chances and they're just gonna put their money in, you know, the next studio sequel and you're gonna miss it. And the smarter retailers are gonna win because they're gonna be able to react quickly to, you know, whatever the hot thing is that comes out. Greg Pan: Right. Do you feel that if the bigger brands start to be overly aggressive, it gives opportunities for smaller upcoming brands to come out who can just be more relationship driven and try to find work with good licensees and retailers that fit their product and market better? Cindy Levitt: 100 %. I feel like the bigger companies, I feel like they could be, if they were to be allowed on their side to be a little, have a little more, you know less finance oriented kind of decisions. They could get so much further by getting into the, know, working with cool licensees, working with cool, young emerging retailers. And I feel like they're just that, you know, I'm saying the license works are so tough, but because it's tough on them, they are being told to hit these numbers, they're being told to do it. And so, yes, I think that the smaller companies are going to, you know, are they going to win? I think there's just going to be they're going to have more opportunity. I don't know if they're going to win because those big guys are so big. But, you know, there's been tough content years, you know, recently and it's hard. It's, you know, what some of the licensors had wanted for their content. just isn't, it just doesn't work. And especially in an environment that we all don't know what's happening. So I feel like the more partnership, especially, you know that all the external things happening. feel like this is the best time ever for everyone to partner more and to be more flexible because we all are in this together. All of us can't survive without the other. And I feel like they need to, everyone needs to know that and take risks together. Greg Pan: I think the silver lining is also the customer is going to buy what they want to buy. They don't like what's on the shelves and they like something else out there. They'll find a way. Cindy Levitt: Yeah, yeah. so, yeah, it's just that everyone needs to be more flexible, more open-minded, and the results, you're right, the customers will buy it, the results will be there, whether you have a guarantee or not, a huge guarantee, if the customer wants it, you're gonna get your royalty. David Schnider: Good. Are there any retailers you're particularly impressed with right now who are carrying licensed products? Cindy Levitt: I think, well, first of all, even though I've been gone from Hot Topic for seven years, I am constantly in awe of all the things they're doing. I think they're on their game and they're doing an amazing job. I find the YM stores, the ones that have that group of think it's Mandy's and Charlotte Russe and there's another one that's kind of a conglomeration of some older companies. They seem to be pretty on it with new presentations of licenses. I'm really impressed by what I see. I am hugely impressed with Boot Barn A lot of people don't even think Boot Barn and they think it's boots, but go walk into a Boot Barn and go look at their marketing. Today, their email blast was about a small documentary on wild horses in the United States and it's fascinating. They are doing some licensing, but I feel like as a retailer, I am so impressed with them. So I feel like there's a couple ones to watch that are, I also think that you would never think it, but Ross stores are on it with their license. You could just never find it when you go in there and they don't do presentations. You know, it's a treasure hunt, but they're pretty sharp. And I think that they're an interesting group. You just can't ever walk in and go, oh, this is what's happening because they have it because you can't find it. But they're on it too. Greg Pan: Got to get Ross and TJ Max Marshalls too, those buyers are on top of things right now. Cindy Levitt: Yeah. Mm-hmm. Right. I also think Walmart fashion, not necessarily licensing, but when we talk about fashion licensing, I think Walmart is doing an amazing job with fashion licensing right now. Or maybe it's joint ventures, but collabs whatever we're calling it. But boy, am I impressed with what they're doing. Greg Pan: And Cindy, you're heavily involved in Licensing International you tell us a little bit about what you are doing with them these days? Cindy Levitt: Well, I'm no longer on the board because I've termed out, but right now I just serve on committees when they need me. always a different committee or mentoring. I do mentoring with them as well. I just wherever they need me, whether it's the awards committee, the Hall of Fame committee, there was a diversity committee. And then sometimes it's individual mentoring. And then at the show, they do like speed dating with up and coming licensees. So I just am there to kind of help as I can. But I would say mostly it's a mentoring and committee role. I still feel like it's a great organization, and especially for young people that are getting into licensing to get their name out there, to go to the events, go, you know, just be kind of get in front of people. It's a great career, great for everyone's career to be really involved. And I feel like a lot of people Licensing International don't realize the kind of data and global industry reporting there is available for you with them. So it's it's I use it constantly for consulting that I do. Greg Pan: For people who are entering their careers in this industry, are the pieces of advice I usually give them? Cindy Levitt: I tell them one is volunteer for everything, get in front of people, get your name out there. Networking is painful for younger people and I feel like networking in person is still one of the best things they can possibly do. To find mentors of their own in the industry and to, I think that no one tells you how to be in licensing, but find someone that can hold your hand and walk you through it is get in front of people, network, get involved, volunteer, and write, well I used to say write thank you notes, but a thank you email. You know, I would tell some of the young buyers and stuff like, if someone takes you to dinner, send them a thank you email afterwards and just get to know people. People remember that. And to be, just to kind of be, you have to stick out. And especially as AI comes into more and more, into all of our worlds, the ones that can stick out and rise above and work, like work harder, know people, relationship building, I think those are the ones that are gonna rise above. And it's all about relationships. And I think it's a hard thing for younger people that they're not comfortable talking and they're not comfortable mingling with others, but it's a hard thing. But once they do it, I think they kind of get into the groove of it and it really helps them. Greg Pan: Yeah, I always encourage people to to trade shows as well. That's one way to get in front of people as well as talk to people from different businesses and brands and retailers. Cindy Levitt: Yeah, absolutely. Absolutely. And also, I think it's really important that they know their product and they know it very, very deep because you need to be able to talk to merchants and marketing people. And if you don't know your own product, and I was shocked when I realized that a lot of licensors don't necessarily know their own product that well, their own properties. Greg Pan: Yes, I definitely saw, well, when I was at Marvel, that is something very difficult to get your head around. 75 years of the comic books, plus all the movies, plus all the TV shows and video games is not an easy property to your head around. Cindy Levitt: But you sure know the ones that do, you sure know who the ones that are that can do it. They stand out. Greg Pan: Yes, yes I do. David Schnider: All right, well, Cindy, I want to thank you for joining us today. It was incredible to hear your insights. If people want to reach you, is there, do you want to share any information about how they can get in touch with you? Cindy Levitt: Sure, it's through LinkedIn or Cindy at CindyLevitt.com. It's a kind of silly email, but it works. David Schnider: It's easy to remember at least. Cindy Levitt: I know, I thought I was so embarrassed about it, but early on and now it works really well. But yeah, please reach out. I still do a lot of mentoring, especially for young people in the industry. And you know, I say being retired, you're not a threat to anybody and kind of you're a safe space. So feel free to reach out. David Schnider: Excellent. All right, thank you very much. Greg Pan: Thank you so much. Cindy Levitt: Thank you. 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