"Material Girl" Hooks Up with Macy's: A Match Set to Ring in Millions

(MoneyWatch) 

"'Material Girl' will enhance the excitement of fast fashion at Macy's," said Jeff Gennette, Macy's (M) chief merchandising officer. And with that, one of the nation's largest retailers joined forces with one of the world's most recognizable recording artists.

Madonna's just signed a deal to deliver a juniors collection under the label "Material Girl," to be launched in about 200 Macy's stores and online in August, just in time for the back-to-school shopping. Can Macy's cash in on a pop icon whose relevance with teens is questionable? The answer is yes -- because she and her entourage are worthy of the challenge.

Corporate Brawn

Iconix Brand Group (ICON) is the heavyweight in Madonna's corner. Sitting pretty on record earnings and revenues for 2009 (up 19 and seven percent, respectively) Iconix has considerable experience with a variety of brands targeted to the youth market. It owns Candie's, Bongo, Joe Boxer, and others and licenses its products to retailers such as Target (TGT) and Wal-Mart (WMT). Iconix also counts Madonna's kissing cousin, Britney Spears, among its stable of celebs. Spears is currently starring in a marketing campaign for Candie's exclusive to Kohl's (KSS).

Together Madonna and Iconix have formed a 50-50 joint venture, MG Icon, which has an exclusive license and services agreement with the singer to use her name for apparel, footwear and other products. As part of the Macy's agreement, the retailer will have the opportunity to launch additional brands in the future with MG Icon. That includes fragrance -- a natural celebrity tie-in -- and a lucrative one as well. (Think Beyonce's deal with Coty, which is estimated to ring in $100 million the first year. You can smell the money.)

Personal Brains

Madonna's uncanny ability to anticipate trends (cone bras notwithstanding) not only propelled her to the top of Billboard's charts but also Forbes' earnings charts which estimated her annual take in 2008 at $110 million.

Let's not forget this is not her first foray into a designer/retail collaboration. Madonna enjoyed a fast-fashion moment in the spotlight when her M collection debuted at H&M in March of 2007 ?€"- and promptly sold out. And she's no stranger to being a spokesmodel. Currently, she's the face of luxury brand Dolce & Gabbana whose campaign is inspired by Italian neorealism cinema, something Gabbana says Madonna knows all about too.

Secret Ingredient

No matter how fashion-forward Madonna may be, the fact that she's a 51 year old mom raises questions about her ability to reach the teen market. Fear not. Her daughter, Lourdes Leon, is part of the creative team. At 13 years of age, Lourdes falls squarely in the target market and she'll be working with mom and Iconix's in-house fashion department.

Image via Flickr user Alessio85, CC 2.0