Can Dylan’s Candy Bar Become the Next Disney?

September 27, 2016, 3:52 PM UTC

Dylan’s Candy Bar is not just selling sweets.

This year marks a decade and a half since the first Dylan’s opened its doors on the Upper East Side of New York City. The brand now has seven freestanding stores, as well as nine licensed locations—mostly in airports—and two shop-in-shops. Impressive reach for a candy store, but not exactly the profile of a retail giant.

Yet Dylan Lauren, the company’s creator and president (and, yes, daughter of Ralph Lauren) is constantly pushing the brand to its limits. In addition to candy, ice cream, and cocktails—the original items offered by the store and depicted in its colorful logo—one can find Dylan’s-branded dog treats, towels, baby products, dolls, lingerie, jewelry, handbags, games, books…the list goes on. In total, the brand offers over 7,000 different SKUs—each of which has been personally approved by Lauren.

And while candy-branded handbags might already seem to be a bit of a stretch to some, Lauren says she has no plans to limit the scope of the brand’s expansion. “There are so many things I want to create,” she says. “I want to license furniture and do candy furniture and there’s pet toys—that could be really fun. There’s so much—home goods, I could keep going—so much room for growth.”

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This past spring, Lauren enlisted licensing firm IMG to help bring those ideas to life. IMG will negotiate licensing partnerships on behalf of Dylan’s and expand its products into new areas.

The way licensing deals are structured varies from brand to brand, but they typically involve royalty fees on a sale of an item, says Bruno Maglione, president of IMG Licensing Worldwide. Fees can range from as little as 5% to as high as 25% depending on the item, he explains. The percentage is generally based on an item’s popularity: “Is there demand for it? A hot property has higher demand than a weaker property,” he says. “It also depends on the margins within the industry itself—luxury items have crazy markups.”

IMG’s role is to ensure that the companies licensing the Dylan’s brand follow certain guidelines—such as using its nine signature colors—and to verify that the products they create make sense for product universe as a whole. This universe, however, seems to be ever-expanding, with the brand considering extensions into kitchen appliances—”candy popcorn maker, ice cream sundae maker, hot chocolate maker” —as well as children’s furniture, school supplies, and stationery.

While going from candy to furniture might seem a little bizarre to some, Interbrand North America CEO Josh Feldmeth, a branding expert who has no affiliation with Dylan’s, says it’s not actually that far-fetched. “I can see it happening,” he says.

The key to brand extension, explains Feldmeth, is tapping into a deeper consumer need, which Dylan’s has clearly been able to do. And what exactly is that need? Levity.

“In a world where everything is responsible, everything is locally sourced, everything that isn’t good for you is frowned upon, these guys are unapologetically about candy,” he says. “They’re loud, they’re fun. They’re saying: ‘It’s okay to feel great.'”

Feldmeth notes that the zeitgeist these days is quite a serious one. With consumers constantly being bombarded with news of terrorist attacks, police shootings, and politics, it’s no wonder they’re attracted to a brand that promises an escape.

That customers can only access the Dylan’s stores in a handful of locations helps the brand retain its specialness. “It shows up when you’re happy, when something exciting is going on,” says Feldmeth.

Feldmeth and Maglione both point to Walt Disney Co. (DIS) as an example of the type of company Dylan’s could eventually become. “It’s appealing to both the child and the child in all of us,” says Maglione. The entertainment conglomerate has managed to stretch the Disney brand to everything from films to amusement parks to apparel—and there’s no mistaking what the brand stands for.

“It’s an unbelievably refreshing alternative to a very serious world,” says Feldmeth about Dylan’s Candy Bar. “If they can keep making people happy, there are no ceilings.”

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