AGENDA REPORT
Meeting Date: November 15, 2022
Item Number:
To: Honorable Mayor & City Council
From: Laura Biery, Marketing and Economic Sustainability Manager Subject: APPROVAL OF THE RECOMMENDATION OF THE BEVERLY HILLS
CITY COUNCIL LIAISON BRANDING AND LICENSING COMMITTEE
REGARDING THE USE OF THE BEVERLY HILLS SHIELD BY
REVOLVE; AND
AUTHORIZE THE CITY MANAGER TO ENTER INTO AN
AGREEMENT, SUBJECT TO APPROVAL BY THE CITY ATTORNEY,
FOR THE USE OF THE BEVERLY HILLS SHIELD BY REVOLVE
Attachments: 1. Proposal by Revolve
2. April 6, 2022 Liaison Report (Without attachments)
RECOMMENDATION
The Beverly Hills City Council Liaison Branding and Licensing Committee, Councilmember Mirisch and Councilmember Friedman, recommends the City Council approve the use of the Beverly Hills Shield by Revolve and enter into an agreement for the use of the Beverly Hills Shield by Revolve for clothing merchandise.
INTRODUCTION
This item seeks City Council approval of the recommendation of the Beverly Hills City Council Liaison Branding and Licensing Committee to approve the use of the Beverly Hills Shield by Revolve, a popular clothing fashion retailer, for use of the Beverly Hills Shield on a Capsule Collection of clothing merchandise. Under the agreement terms proposed for approval, the City will receive a one-time licensing fee payment of $50,000 plus any applicable royalty payments calculated at 15% of the Net Sales to the extent that any such sales occur over 100 units of each of the 30 SKUs listed in the Revolve Capsule Collection utilizing the Beverly Hills Shield.
DISCUSSION
Staff receives inquiries from individuals and businesses looking to use the Beverly Hills shield or its likeness on products and merchandise. As requests are received, they are
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Meeting Date: November 15, 2022
reviewed by the Beverly Hills City Council Liaison Branding and Licensing Committee (Committee). The Committee met on April 6, 2022, to discuss the use of the Beverly Hills shield by Revolve and provide direction.
Founded in 2003, Revolve is a fashion retailer catering to Millennial and Gen Z female consumers. In 2020, Revolve had 1.5 Million active customers and reported $581 million in net sales. The Revolve customer is college educated, with a higher than average disposable income, and roughly 18-40 years old.
Revolve is proposing a Capsule Collection of items that includes patches, graphics, and insignia including the Beverly Hills Shield, BH, and 90210 on various clothing items and accessories. Revolve’s marketing efforts for the collection may include brand promotion opportunities in Beverly Hills including a launch event in Beverly Hills, marketing/influencer collaborations, as well as a pop-up retail location in Beverly Hills. It should be noted that any launch events or pop-up retail location experiences in Beverly Hills will be required to apply for any and all applicable Beverly Hills permits separate and above the license fee paid for use of the Beverly Hills Shield.
During the April 6, 2022 Liaison Meeting, CMG Worldwide, Inc., the City’s trademark licensing agency, attended to receive feedback and direction regarding the Revolve proposal.
After further discussion during the Liaison Meeting, the Committee directed CMG Worldwide, Inc. to work with Revolve on the following items and if reconciled, bring forward an item to the full City Council with a recommendation for approval:
1) An initial $50,000 one-time, non-refundable license fee a. Includes 18 SKUS (Stock Keeping Units)
b. Limit up to 200 units per SKU
c. Maximum total units of 1,800. Anything above this amount of units, or sales in excess of $350,000 for the Capsule Collection, would trigger Revolve to pay a 15% royalty fee on the excess units and sales.
2) Compensation with both a licensing fee and royalties included in the agreement
3) Term of the agreement to be one year
4) Marketing and promotion of the campaign will be 2-4 weeks 5) Any permit requirements for marketing/promotional events shall be obtained separately and costs for permitting for marketing/promotional events is separate from the license agreement fees
CMG Worldwide, Inc. was able to work with Revolve to meet nearly all of the terms requested by the Liaisons above. The one term that differs from the discussion with the Liaisons is the following:
1) An initial $50,000 one-time, non-refundable license fee a. Includes 30 SKUS (Stock Keeping Units)
b. Limit up to 100 units per SKU
c. Any sales in excess of 100 units on any SKU, would trigger Revolve to pay a 15% royalty fee on the net sales above that amount.
It should be noted that during the Liaison Meeting, discussions occurred regarding if the entire Capsule Collection should be charged at a royalty fee of 10% wholesale or 5% Meeting Date: November 15, 2022
retail rather than the one-time $50,000 license fee plus the 15% royalty fee on net sales above the threshold. CMG Worldwide, Inc. stated that comparable agreements are charged royalty fees at 10% wholesale or 5% retail. For comparison, if all of the units in the Capsule Collection were charged at a 5% retail rate royalty instead of the one-time fee plus royalty (using the mid-range for the product price point of $180); the effective 5% retail royalty payment on 3,000 units would be $27,000 which is less than the proposed one-time $50,000 license fee. As such, CMG Worldwide, Inc. recommends moving forward with the one-time $50,000 license fee plus the royalty fee on net sales above 100 units on any of the 30 SKUS.
If approved by the City Council, a license agreement will be executed with terms that include the following:
Term: The Agreement shall commence on the Effective Date and, unless terminated sooner, end one (1) year from the Launch of the Capsule Collection.
For purposes of the Agreement, “Launch” shall mean when the Capsule Collection first appears and is available for sale Online or in Physical Stores, whichever is earlier.
Quantity: The Capsule Collection shall consist of 30 SKUS (stock keeping units/unique inventory products) and up to 100 units for each SKU.
Goods: Revolve may use the Beverly Hills Shield in connection with the production and sales of Tube Tops, Crop Tops, Going out Tops, Bra Tops, Graphic Tees, Cargo Pants, Low Rise Jeans, Jersey Dresses, Event Dresses, Belts, Necklaces, and Headscarves. Revolve will include the following notation on the label and/or hang tag of the collection items: “The Beverly Hills Shield™ is a trademark of the City of Beverly Hills, www.BeverlyHills.org. ” Retail: The Capsule Collection will be sold online where Revolve sells its merchandise in the ordinary course of its business and in pop-up stores in Beverly Hills.
Advertising. Revolve shall submit all catalog images featuring the Goods (i.e. images of the Goods appearing on the product pages on Revolve’s website), for use in advertisements and promotional material to the City for its written approval prior to publication.
Compensation Fee and Royalties: Revolve shall pay a one-time, nonrefundable advance payment fee of $50,000 (“Licensing Fee”) representing the royalty of the Net Sales for up to 100 units of each of the 30 SKUs payable upon execution of the agreement; and also pay royalties during the term. Royalties will be calculated as additional payments of 15% of the Net Sales to the extent that any such sales occur over 100 units of each of the 30 SKUs. Net Sales are defined as actual sales of the Goods less customary, reasonable, and accountable trade discounts, customer returns, allowances, markdowns, chargebacks, packing costs, payment processing fees, insurance, transportation costs, customs duties, sales and use import, export, and excise taxes. Net Sales shall not include Liquidation Sales. "Liquidation Sales" shall mean Goods that are sold at a discount of more than 25% of the full retail price.
Attachment 1 to this Report provides additional information about the proposed Revolve Beverly Hills capsule line and branding trim. The Capsule Collection shall consist of 30 Meeting Date: November 15, 2022
SKUS (stock keeping units/unique inventory products) and up to 100 items for each SKU. The price points for these items would range from $85-$350. In the past, similar Revolve partnerships for other brands have sold out within the first week of launch of the Capsule Collection.
FISCAL IMPACT
The fiscal impact of the approval of the use of the Beverly Hills Shield by Revolve includes the one time licensing fee of $50,000 plus any additional royalty payments.
Royalty payments are calculated at 15% of the Net Sales to the extent that any such sales occur over 100 units of any of the 30 SKUs listed in the Capsule Collection during the term of the agreement (one year from the launch of the Capsule Collection).
Nancy Hunt Coffey,
Assistant City Manager
Approved By
Attachment 1
REVOLVE x Beverly Hills
Capsule Collection
Collaboration Overview & Marketing
TABLE OF CONTENTS
ABOUT REVOLVE
THE REVOLVE GIRL
REVOLVE BY THE NUMBERS
THE COLLECTION
• OVERVIEW
• INSPO & DESIGN
MARKETING
EVENT CONCEPTS
REVOLVE X BEVERLY HILLS
About REVOLVE
F o u n d e d i n 2 0 0 3 a n d b a s e d i n L o s A n g e l e s , R E V O LV E i s t h e n e x t g e n e r a t i o n r e t a i l e r f o r M i l l e n n i a l a n d G e n Z c o n s u m e r s .
We l e a d t h e w a y i n p i o n e e r i n g b r a n d m a r k e t i n g c a m p a i g n s t h a t r e a c h b e y o n d t h e b r o w s e r , a n d i n t o t h e social lifestyle of our highly engaged global audience.
B y h a r n e s s i n g t h e p o w e r o f o u r i n f l u e n c e r n e t w o r k , a n d l e v e r a g i n g e x p e r t i s e i n p r o d u c t c u r a t i o n , d a t a i n s i g h t a n d c u s t o m e r s e r v i c e , w e h a v e b e c o m e a p o w e r f u l p l a t f o r m f o r e m e r g i n g a n d e s t a b l i s h e d b r a n d s .
REVOLVE X BEVERLY HILLS
Who is the
REVOLVE girl?
REVOLVE X BEVERLY HILLS
Fun-Loving, Globetrotting, Fashion Fanatic
S h e d o c u m e n t s e v e r y t h i n g s h e d o e s , e v e r y w h e r e s h e travels, and everything she wears on social
Her style is unique, elevated and on trend
Her muses include models, influencers, and celebrities
She loves experimenting w i t h h e r l o o k &
is always up for trying new trends and brands
T h e R E V O LV E c u s t o m e r ’ s a g e r a n g e f r o m 18-40 years old
She’s college educated
She is a global citizen
She has a higher than average disposable income
By the Numbers
4.5M
ORDERS PLACED IN 2020
404K
DAILY PAGE VISITS
1.5M
ACTIVE CUSTOMERS IN 2020
1.36M
ACTIVE EMAILSUBSCRIBERS IN 2021
$581M
2020 NET SALES
REVOLVE X BEVERLY HILLS
REVOLVE.COM
By the Numbers
@REVOLVE SOCIAL MEDIA FOLLOWERS
7,400
INFLUENCER NETWORK
OVER 6.9M
REACH
5.1M
INSTAGRAM FOLLOWERS
25.2K
YOUTUBE SUBSCRIBERS
341.3K
TIKTOK FOLLOWERS
1 . 5 M
FACEBOOK FOLLOWERS
REVOLVE X BEVERLY HILLS
COLLECTION
INSPO & DESIGN
REVOLVE x
Beverly Hills
REVOLVE X BEVERLY HILLS
R E V O LV E w i l l c r e a t e a c a p s u l e c o l l e c t i o n f e a t u r i n g t h e B e v e r l y H i l l s t r a d e m a r k t h a t w i l l b e s o l d e x c l u s i v e l y o n R E V O LV E . c o m .
I n s p i r e d b y t h e c l a s s i c s t y l e o f t h e l a d i e s s h o p p i n g o n R o d e o D r i v e t o t h e p r e p p y s t u d e n t s o f 9 0 2 1 0 i n t h e 1 9 9 0 s e r a , t h e R E V O LV E x B e v e r l y H i l l s c o l l e c t i o n i s a n o d t o f a s h i o n ’ s p a s t w i t h t h e m o d e r n t r e n d s a n d s i l h o u e t t e s t h a t w e l o v e t o d a y. T h e c a p s u l e c o l l e c t i o n m i x e s t w e e d s e p a r a t e s w i t h g r a p h i c v i n t a g e - i n s p i r e d l o u n g e w e a r w h i c h e n c o m p a s s e s t h e l a i d b a c k C a l i f o r n i a n l i f e s t y l e w i t h t h e f a s h i o n f o r w a r d s t y l e o f B e v e r l y H i l l s .
To l a u n c h t h e c o l l e c t i o n , R E V O LV E w i l l c r e a t e a 3 6 0 º c a m p a i g n e n c o m p a s s i n g o u r g l o b a l i n f l u e n c e r n e t w o r k , p r o d u c i n g p r e m i u m c o n t e n t a c r o s s s o c i a l m e d i a , a n d c r e a t i n g a l a r g e - s c a l e a c t i v a t i o n a n d l a u n c h e v e n t .
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MARKETING
REVOLVE w i l l p r o m o t e t h e c o l l e c t i o n a c r o s s i t s e-commerce and marketing channels, including:
E d i t o r i a l p h o t o s h o o t w i t h s u p p l e m e n t a l v i d e o c o n t e n t for social usage
D e d i c a t e d h o m e p a g e f e a t u r e a n d n e w s l e t t e r t o REVOLVE subscribers
BRAND MARKETING: • Launch event • Influencer and customer-facing activation • Pr o d u c t s e e d i n g t o t a r g e t e d i n f l u e n c e r s a n d c o n t e n t creators
• S o c i a l p o s t s o n R E V O LV E c h a n n e l s i n c l u d i n g Instagram, TikTok and Youtube
• Fashion and Business press
Marketing
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EVENT CONCEPTS
BEVERLY HILLS
BUS TOUR
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R e c r e a t e t h e c l a s s i c H o l l y w o o d B u s To u r t h a t s t o p s a t m u l t i p l e i c o n i c l a n d m a r k s a n d p h o t o m o m e n t s a r o u n d B e v e r l y H i l l s , w h e r e i n f l u e n c e r s a n d c u s t o m e r s m a y h o p o n a n d h o p o f f a t e a c h spot to take photos.
E a c h “ s t o p ” w i l l f e a t u r e a R E V O LV E x B H b r a n d e d p h o t o m o m e n t
Stops include:
• Beverly Hills sign Beverly Gardens Park
• 2 Rodeo Drive; Via Rodeo street sign
• P o p u l a r c a f e /r e s t a u r a n t w i t h b r a n d e d R E V O LV E x B H beverages/snacks
• Palm tree lined neighborhood on Canon Drive
• R E V O LV E x B e v e r l y H i l l s m a n s i o n
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A s a s t a n d a l o n e a c t i v a t i o n a n d /o r s t o p o n t h e R E V O LV E x B H B u s To u r , t h e e x c l u s i v e R E V O LV E x B e v e r l y H i l l s m a n s i o n w i l l b e t h e l o c a t i o n f o r t h e l a u n c h e v e n t , a g i f t i n g s u i t e f o r t h e c o l l e c t i o n f o r i n f l u e n c e r s a n d V I P s , with photo moments created throughout the space.
• Open for 7-10 days
• Gifting by appointment or invite only
POP UP SHOP
& BRAND EXPERIENCE
REVOLVE X BEVERLY HILLS
R E V O LV E t o t a k e o v e r a r e t a i l s p a c e i n B H , o n o r a r o u n d R o d e o D r i v e , t o o p e n a p u b l i c p o p - u p s h o p t o s e l l t h e c o l l e c t i o n , e x c l u s i v e b r a n d e d m e r c h , o f f e r b r a n d e d f u n t a k e a w a y s . L a u n c h e v e n t t o a l s o t a k e p l a c e t h e p o p - u p . • Open for 1-2 weeks
• Open to the public
• Launch event by invite only
BLOCK PARTY
AT 2 RODEO
REVOLVE X BEVERLY HILLS
R E V O LV E t o t a k e o v e r t h e i c o n i c c o r n e r a t 2 R o d e o D r i v e t o h o s t a p r i v a t e “ b l o c k p a r t y ” c e l e b r a t i n g t h e l a u n c h o f t h e R E V O LV E x B e v e r l y H i l l s c o l l e c t i o n . E v e n t t o i n c l u d e l i v e m u s i c a l p e r f o r m a n c e s , d e c a d e n t f o o d a n d b e v e r a g e s p r o v i d e d b y l o c a l r e s t a u r a n t s , a n d branded photo moments. By invite only.
Pending approval from 2 Rodeo management, or opt for similar location
REVOLVE X BEVERLY HILLS
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Attachment 2
CITY OF BEVERLY HILLS
POLICY AND MANAGEMENT
MEMORANDUM
TO: City Council Liaison/Branding and Licensing
FROM: Laura Biery, Marketing and Economic Sustainability Manager DATE: April 6, 2022
SUBJECT: Request for Use of the City Shield by Revolve
ATTACHMENT: 1. Proposal by Revolve
INTRODUCTION
The City periodically receives inquiries about the use of the Beverly Hills shield. Revolve, a popular online fashion retailer, has reached out to the City regarding a Beverly Hills capsule collection of items utilizing the Beverly Hills shield.
DISCUSSION
Staff receives inquiries from individuals and businesses looking to use the Beverly Hills shield on products and merchandise. As requests are received, they are referred to the City’s branding and licensing consultant, CMG Worldwide.
Founded in 2003, Revolve is a fashion retailer catering to Millennial and Gen Z female consumers. In 2020, Revolve had 1.5 Million active customers and reported $581 Million in net sales. The Revolve customer is college educated, with a higher than average disposable income, and roughly 18-40 years old.
Revolve is proposing a capsule collection of items that includes patches, graphics, and insignia including the Beverly Hills shield, BH, and 90210 on various clothing items and accessories. Revolve’s marketing efforts for the collection will include brand promotion opportunities in Beverly Hills including a launch event in Beverly Hills, marketing/influencer collaborations, as well as a pop-up retail location in Beverly Hills.
CMG Worldwide has provided the following negotiated deal terms for the proposal:
Revolve x Beverly Hills Proposal
Term: 1 year (2022-2023)
Fee: $50,000 (one-time)
Products: 150 units of each (not to exceed 200)Tube Tops, Crop Tops, Going out Tops, Bra Tops, Graphic Tees, Cargo Pants, Low Rise Jeans, Jersey Dresses, Event Dresses, Belts, Necklaces, and Headscarf Distribution
Channels:
Licensee’s online store at www.Revolve.com and a pop-up store in Beverly Hills
2 Attachment 1 to this Report provides additional information about the proposed Revolve Beverly Hills capsule line which would include Tube Tops, Crop Tops, Going out Tops, Bra Tops, Graphic Tees, Cargo Pants, Low Rise Jeans, Jersey Dresses, Event Dresses, Belts, Necklaces, and a Headscarf.
FISCAL IMPACT
If the above proposed terms are accepted, the fiscal impact of the Revolve license agreement would be a one-time payment of $50,000. The term of the agreement would be for one year (2022-2023).
RECOMMENDATION
It is recommended that the City Council Branding and Licensing Liaison Committee provide direction regarding use of the Beverly Hills Shield by Revolve. If the terms above are agreed upon, an agreement may be drafted for presentation to the Committee and later the full City Council for review.