I haven’t used the words “shopped,” “purchased,” and “PacSun” in the same sentence for more than a decade. So now, in an existential daze, I’m wondering how I arrived at the “Thanks for shopping PacSun, here is your order confirmation” page.

No, I’m not between the ages of 13 and 16. No, I didn’t happen to set foot in my local mall, even though a Cinnabon does sound good. Lastly, yes, I did check my calendar, and we’re definitely still in 2023 and not 2003.

As a fashion enthusiast, and even a self-proclaimed “sartorialist,” for me a typical shopping excursion (more so an online shopping binge these days) involves the procurement of vêtements from stores and brands tailored specifically to style-savvy adults. So how, you ask, did I come across PacSun’s website? This New York Times article commenting on PacSun’s recent partnership with The Metropolitan Museum of Art, or the “Met,” is to blame. Its fourth collection with the museum was released on Aug. 25th.

Interesting Fashion Collaborations

What PacSun has done here is utter genius. My impulse purchase is a testament to its success. Although the main purpose of the collaboration is to open the world of fine art to a younger audience, PacSun was somehow able to rope me in as well. Previously known as Pacific Sunwear of California before rebranding to PacSun in 1999, the SoCal-themed brand has aligned its marketing strategies with the beloved Met, which sees 2 million to 3 million visitors annually. Other unconventional collaborations in the fashion and retail space include Virgil Abloh’s “Off-White” collaboration with the Musée du Louvre, an homage to the artistry of Leonardo da Vinci, reflected in Abloh’s clothing and accessory designs. The collaboration, similar to that of PacSun and the Met, was intended to merge the fashion and fine-art worlds. Gucci and The North Face continued the trend with their 2021 collaboration, which saw the trademark Gucci logo and print embossed on puffer jackets and hiking boots, bridging the gap between outdoors enthusiasts and Gucci fans. Lastly, the two most unlikely pairings made for very interesting and unthinkable collaborations: First, Dolce & Gabbana and SMEG began their collaboration in 2016 to create “Sicily is My Love,” a collection of SMEG kitchen appliances adorned with Sicilian art and landscapes created by Sicilian artists and curated by Dolce & Gabbana. The collaboration is ongoing, as the brands have launched new collections since then, most recently in June 2023. The appliances could probably be purchased just as kitchen art, never to be used – they’re that captivating. Second, Adidas and Arizona Iced Tea collaborated to create a bespoke sneaker for Adidas’ Superstar sneaker line. The iterations of the shoe designs displayed the signature and easily recognizable cherry blossoms from the Arizona Iced Tea can, while also incorporating its mint green color and gold accents.

Brand partnerships like these typically stem from intermediary brand licensing agencies making connections between internal stakeholders from different companies. They may also be inspired by a brand’s equity and mark on the fashion industry, its popularity and social media presence, or a brand’s desire to experiment and try something new. One thing all brand partnerships have in common though is an intellectual property (IP) license, also known as an integrated marketing promotion, which shapes the brands’ relationship.

Key IP Licensing Provisions

Less fun, but absolutely critical: Once the necessary stakeholders have decided to move forward with a partnership, due diligence and contract formation begin. Depending on the nature of the deal, one or multiple parties to an agreement may need to acquire certain types of licenses to use the other brand’s logo, or other relevant intellectual property in the way envisioned by the collaboration. Negotiating an IP license takes considerable time and investment of resources. Therefore, to mitigate future risk and ensure a smooth negotiation process, starting with a high-level term sheet that outlines the deal points would be in the parties’ best interest – to establish a mutual understanding of basic terms, including the purpose of the collaboration. Term sheets serve as a north star to guide due diligence and help ensure the parties are aligned and able to perform before negotiating the technical details of a license. A brand integration or collaboration term sheet usually includes:

• What IP will be licensed.
• A description of the potential product line.
• The timeline and territory.
• The fee structure.
• Promotional investments.

With respect to the IP licensing terms, the grant of the license must identify:

• Whether the license is limited or unlimited.
• Whether the license is exclusive or nonexclusive.
• The territory in which the license may be used.
• The length of time for permitted use.
• Royalties and fees.

Once a (binding or nonbinding) term sheet is executed, the parties can negotiate the long-form agreement terms, which should address at least:

• Each party’s brand standards.
• Termination rights.
• Liability and indemnification for certain breaches.
• Confidentiality obligations.
• Detailed mutual marketing and media buy commitments.
• The press and media approval process.

For fashion and art licensing, the parties should clarify their manufacturing processes as well as how to police quality and deter counterfeiting.

Conclusion

Brand collaborations in the fashion industry are frequently received with much excitement – from both the brands and its customers. One could think the more unconventional a brand pairing, the wider the audience, given such a partnership targets two different consumer groups instead of just one. Each brand has an opportunity to grow its business, accessing an audience it may never have been able to attract. However, brands seeking to collaborate with other brands (including with celebrities or influencers) must agree on the goals of the partnership and formalize those expectations with practical contractual language.

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