“My change and keys fall out sitting,” posted Robert C. about his Dockers Men’s Classic Fit khakis. “Excellent with major exception of front pocket depth,” wrote Disappointed Loyalist, who posted a one-star review of a pair of pebble-brown Signature Classic Fit trousers. “These are actually 4-star pants,” clarified IWearPants in an online review thread. “Unfortunately, they’ve committed the ultimate atrocity in fashion; they made the pockets too shallow.”

By IwearPants’ measurement, the pockets on his new Dockers are 1.5 inches less deep than his old pair. And he made a plea: “If Dockers (or parent Levi Strauss) needs to raise the price by a couple of bucks per pair, so be it. Just give me back deep pants pockets on my Dockers.”

Levi Strauss is actually no longer the parent company of Dockers; in May it sold the label to brand ownership giant Authentic Brands Group (ABG) for an initial value of $311 million, with the potential to reach $391 million based on performance under Authentic’s ownership. (ABG declined to comment on the Dockers brand or its pocket measurements.)  

The Dockers pocket predicament—which some dismiss as an imagined problem—predates ABG’s ownership. But it shows the peril of a 1.5-inch difference—that razor’s edge between a loyal customer and one who abandons a product or company. Even the most beloved brands can become vulnerable following perceived changes or quality erosion that upset passionate consumers—and when heritage brands are purchased by holding companies like ABG, which seek to optimize and grow the brands globally, that passion can be a double-edged sword.

Dockers followed a well-trodden path, and one that many iconic brands have taken in recent years. Brand management companies including ABG, WHP Global, and Marquee Brands have assembled portfolios that include dozens of household-name brands. These companies have emerged as the new power brokers in fashion and retail, raking in some $50 billion in sales globally each year.

The cherished American retail names now owned by these companies make a long list: WHP owns Toys “R” Us and Babies “R” Us, Anne Klein, Express, Bonobos, and Rag & Bone. Marquee owns the revamped Martha Stewart brand, BCBG, Laura Ashley, and Isotoner. ABG, the largest player in this space, owns a vast empire of more than 50 brands, including Eddie Bauer, Champion, and Reebok.

Also under the ABG umbrella are investments in the name, image, and likeness rights of various boldface names, including soccer superstar David Beckham and basketball great Shaquille O’Neal. ABG also owns the names and likenesses of long-deceased icons including Elvis Presley, Marilyn Monroe, and Muhammad Ali.

A $1.4 billion deal for ABG to own a controlling interest in the Guess? brand is expected to close in 2026 after a bidding war. If that deal goes through, Guess? will be among the largest brands in the ABG portfolio, and is expected to bring its annual retail sales to $38 billion each year. WHP’s annual retail sales are $7 billion, and Marquee’s are $3 billion and climbing. 

Globally, the broader brand licensing industry is growing rapidly—from $295 billion in 2024 to an expected almost $400 billion in 2029. That includes the brand-licensing arms within blockbuster companies such as Disney, which licenses its characters for toys and other merch, and the NFL, which licenses team jerseys. Rising consumer demand, star-powered celebrity endorsements, and the growth of virtual branding, in which a brand exists and sells to customers entirely online with no physical retail stores, have fueled this growth.

Each brand management company operates differently and there is no unified approach, but generally, these firms will purchase a brand’s intellectual property (IP), often during financial distress or bankruptcy. That generally means the brand management companies own trademarks, logos, copyrights, and creative content, and control the rights to license the brands to third parties. The brand managers then enter into lucrative licensing deals with a network of third-party partners that handle manufacturing, shipment to retailers, marketing and advertising, as well as store displays and sales, in various parts of the world.

The question at the heart of this thriving industry, which often includes private equity backers, is whether the second life these brands get after being rescued from the brink of oblivion can be profitable without sacrificing quality. In some cases the born-again versions of these once iconic brands are smashing successes. In others, they can turn into zombie brands, churning out inferior products that leave consumers feeling confused and even betrayed.

“Licensing can genuinely keep a brand alive when it’s losing momentum,” said Armando Zuccali, CEO at private financial services firm Gag London Equity Capital which partners with businesses and operating partners. “The risk is when it becomes the whole strategy and everyone starts chasing royalties and door count to hit numbers. That’s usually when the products being to slip, quietly at first.”

The brand management playbook

The core of this business is a volume play: The brand management companies buy IP that they believe could be bringing in more revenue, with the right push. Buyers often pay lip service to their responsible guardianship of beloved brands, but there’s an inherent tension in the proposition: If the strategy is to re-popularize and optimize a brand, the pressure to produce quickly, cheaply, and at huge scale to maximize licensing revenue can lead to what critics call “enshittification”—the gradual decline of quality as brands chase volume over value.

Instead of manufacturing stuff itself, the industry relies upon a vast network of “operating partners”—companies that license the brand and do the heavy lifting of producing and selling products. The brand management companies typically inspect and approve the products for sale, but the design, craftsmanship, and manufacturing are all handled by the operating partners, explained Sonia Lapinksy, managing director in fashion retail at the consulting firm AlixPartners.

Critics claim some brand management companies offer little oversight while allowing operating partners to slap logos on a vast array of subpar products. Sometimes, the operating partners hire the same designers and suppliers that worked with a brand prior to its purchase to maintain continuity, said Lapinsky, but problems can creep in when operating partners’ practices are unscrupulous, or they cut corners.

Zuccali of Gag London Equity Capital, who has overseen retail facilities projects in Europe, the Middle East, and Africa, said brand DNA usually only survives a licensing sale if the original product teams maintain authority by approving fabrics, checking construction, visiting factories, and pushing back when someone suggests a shortcut. “If that stops happening, the brand becomes a logo anyone can rent,” he added.

Erik McGregor/LightRocket via Getty Images

The step that often generates skepticism is when brand management companies remove creatives and founders who previously maintained strict control in all aspects of production—walking production lines around the world to check the stitches per inch on a pair of pants, for instance, or the inclusion of real buttonholes on a suit versus decorative buttons.  

“In theory, there should be some standards with these arrangements that maintain a level of quality,” said Lapinsky. “Or else eventually the products won’t sell, and the brand managers won’t be able to collect the royalties.”

It’s a matter of balancing quality with quantity, explained Aaron Duncan, a former creative director for global licensing at Playboy Enterprises and an associate professor and chair of global fashion management at Fashion Institute of Technology. But when the operating partners have bet on the brand by guaranteeing a fee to the IP owners, they sometimes  “go rogue” to ensure their return on investment, he said.

Duncan, who has led global strategy and business development for brands including Barbie and Hot Wheels, recalled one licensee who opened a shop-in-shop in Seoul for a different brand he can’t name due to a confidentiality agreement. He had not approved the shop, and it wasn’t the right aesthetic for the brand, said Duncan. While most partners are honest in their business dealings, he said, he also has had apparel manufacturers that secretly sub-licensed a brand to other manufacturers. By the time it was discovered, the unauthorized products were already for sale. “Most of the time, you’re not even finding out about it until someone goes shopping in a mall in the middle of nowhere and sees it,” said Duncan. “That’s the danger.”

Those revenue-generating measures can dilute the brand, Duncan added. And if a partner has damaged the brand, it can be difficult to recover its shine.

The nostalgia paradox

What’s driving consumers back to beloved brands of the past in the first place? According to brand strategist Jean-Pierre Lacroix, nostalgia plays a big role, and that nostalgia is rooted in three impulses, particularly in younger consumers: Anxiety, and need for mental escape; the search for non-mainstream brands; and the power of influencers.

“The undercurrent is there’s a lot of anxiety in the marketplace right now, and people are looking for a way of escaping this anxiety,” said Lacroix. “The wars, the tariffs, the instability of the marketplace, the lost jobs, AI—all these things are unsettling for people.” 

Brands from the past can soothe, he said, allowing anxious consumers “to live in the past where it was a great life.” For Gen Z, who wasn’t even born when many of these brands were in their heyday, the appeal is complex: Influencers seeking to be unique are using unboxing videos on YouTube and TikTok to showcase products beloved by their parents’ generation.

Clay Routledge, a social psychologist who specializes in nostalgia, wrote in the New York Times that some 60% of Gen Z wish they could teleport to those pre-iPhone days—which could explain why they’re chasing tangible offline experiences like vinyl records, photo albums, and board games.

For instance, Champion-branded running shoes are back after they nearly disappeared. They’re popular because they tick some of those key boxes, said Lacroix—a brand without the ubiquity of Nike, a uniqueness that makes the wearer stand out, and the nostalgia factor that evokes better quality.

Champion invented the hoodie in the 1930s, and engineered it for pro-athletes to stand up to repeated wear and tear, weather, and travel. Under ABG’s stewardship, Champion is on its front foot again, with a new partnership to sell at Target and a fashion-forward focus. Its products are being marketed as high-quality and substantial—with a trademarked reverse weave to resist shrinking.

The Martha Stewart moment

Martha Stewart—a brand that encompasses home and garden products, content, and its eponymous founder’s likeness—is now part of the Marquee Brands portfolio, and it exemplifies the nostalgia phenomenon. It also demonstrates how a brand management company can leverage and optimize a cherished brand by bringing it new fans and customers. The company relaunched Stewart’s seminal 1982 book Entertaining in November after noticing that it was selling for hundreds of dollars on eBay, said Marquee CEO Heath Golden.

In a marketing blitz, Stewart—America’s first self-made female billionaire and a pop culture figure whose appeal has endured for decades—has made the media rounds this fall, appearing on the Today show to discuss her book while cooking mushroom and Tuscan tomato soups for sweater-weather season. There are also collaborations: Fans can buy seven of the desserts from Stewart’s book at Crumbl Cookies stores.

“Martha Stewart is having a moment,” said Mark Weber, a podcaster and former CEO of Calvin Klein, The Donna Karan Company, PVH Corp, and LVMH. “She looks great, and she’s out there in front of the public and creating demand.”

But the guru of domesticity’s brand also offers an illustration of what can go wrong when a brand is sold to new owners bent on rapid optimization. Martha Stewart Living Omnimedia went public in 1999, valued at $2 billion, and raked in nearly $1 billion in annual retail sales in the late 1990s and early 2000—then changed hands multiple times following that peak. In 2004, following Stewart’s five-month prison sentence related to insider trading charges, the stock cratered, eventually losing 70% of its value. In 2015, brand management company Sequential Brands Group acquired Martha Stewart Living Omnimedia for $353 million—a bargain at less than a fifth of its peak valuation.

Under Sequential’s stewardship, the brand failed recover its previous cachet. Sequential went out of business after bankruptcy proceedings ended in 2022, but a former executive who spoke anonymously because they still work in the industry said the company made the mistake of attempting to saturating the retail market with Stewart’s brand. “The company wanted Martha Stewart’s name on every single product category from picture frames to sneakers to face cream,” the executive said. With a lifestyle brand meant to evoke aspirational entertaining, that indiscriminate strategy undermined the narrative of curated or special products, the veteran exec added.

In 2019, Marquee Brands acquired Martha Stewart from Sequential at an even lower price, $215 million. But under Marquee, Stewart’s brand appears to have thrived. By 2021, Stewart’s products were raking in roughly $900 million in combined retail sales annually, and were in 70 million households. Forbesestimated Martha Stewart Kitchen, a cabinetry, countertops, and shelving line, could hit $1 billion in retail sales this year.

Golden told Fortune that the company mines nostalgia, but it also invests heavily in consumer data and updates products and marketing for more modern tastes. “We love our 19 brands like we love our children,” said Golden. Along with nostalgia, consumers crave authenticity, and Martha Stewart has it in spades, he said.

Plus, Stewart has a strong social game, including almost 3 million followers on Instagram, where Stewart posts what followers affectionately call “thirst trap” pics of herself, décor, and images from around her estate, including of garden-grown garlic and chrysanthemums.

Social media has completely changed the way companies create interest and demand. “We’re in the want business,” said Weber. “We’re in the business of creating a craziness in you to go out and buy something new.”

The quality risk

Neil Saunders, a retail analyst and consultant, said it’s not just in the immediate aftermath of an acquisition that matters, but how the brand value grows over its lifetime. Saunders pointed to Brooks Brothers, which was owned by ABG and is now under an ABG-backed joint venture with J.C. Penney called Catalyst Brands, as a brand that has dealt with some early stumbles it is working to overcome. Catalyst is the brand licensee for Brooks Brothers in the U.S. and operates design, sourcing, e-commerce, and stores domestically.

Under ABG, Brooks Brothers launched some secondary, lower-priced clothing ranges called “diffusion” lines, Saunders said, but the clothes were “a little bit shabby.” For the nostalgia play to work, the products still have to be good and the price has to be right, said Saunders. “No one will buy into a brand or buy products from a brand just because there’s an element of nostalgia,” he said. (Catalyst has not responded on the record to a request for comment.)

The mechanisms of decline are subtle but cumulative, and customers usually feel it before anyone inside a company will admit it, said Zuccali. “The leather seems thinner; a zipper catches; buttons look fine in photos but feel cheap in the hand,” he said. “Once trust breaks there, it’s really hard to get back.”

Any kind of quality degradation can alienate a brand’s most valuable customers, said Gabriella Santaniello, founder of brand consultancy A Line Partners. And some—especially the wealthier older customers who have personal allegiance to particular brands—are difficult to win back. “Gen X is the most likely to be disappointed in you if you’re a brand,” said Santaniello. “And they’ll hold a grudge—it’s harder for them to move on.”

Whispers have already begun about the fate of former Hollywood darling Badgley Mischka. The evening wear label was acquired for an undisclosed price in April by a joint venture between global brand licensing company Established Inc. and ACI Licensing, in a deal that saw the namesake cofounders Mark Badgley and James Mischka exit the company after more than two decades.

Andy Cohan, co-CEO and co-founder of ACI, said Badgley and Mischka’s departure won’t change the brand all that much. ”We’ve adopted and maintained their point of view and their brand positioning on a go-forward basis, with a goal of taking the brand and really extending it.” 

Dia Dipasupil/Getty Images

But founder transitions like the one at Badgley Mischka are always uncertain, said Zuccali. “Their brand has such a specific sense of proportion and movement that it’s hard to put into guidelines,” he said. “But in a year, maybe 18 months, we’ll know whether the collections still have that recognizable handwriting, or if they start shifting toward something more generic. I’m hoping for the former.”

Positioned for growth

Brand management companies are adamant that they are evolving these brands and setting them up for long-term success. Golden, CEO of Marquee, said the growth in licensing businesses has occurred during the past decade and collective volume “will only grow from here.” The model is acquisitive and competitive enough for bidding wars over prized names, and Marquee will likely buy at least two to three brands each year, he said.

The reality, said Golden, is that the fragmented, geopolitically complex world today makes it challenging for traditional brand companies and standalone brands to scale globally. He added that even the strongest companies are “looking to offload brands to us in an effort to extend their runway.”

Andy Dunn, co-founder of the menswear brand Bonobos, said he’s happy to see the brand he created thriving under the brand management model. Dunn and his partners first sold Bonobos to Walmart in 2017, then it was sold to WHP Global in 2021. Dunn no longer has an ownership stake in the company, but serves as an advisor. He bought multiple pairs of shorts while on a trip in the Midwest this month, he told Fortune, and said he was pleased to see standards have been maintained, and even improved. “I’m blown away by how much better the product has gotten,” said Dunn. “The quality has only improved over the last five years.”

The difference boils down to continuity, Dunn said, noting that WHP kept on some technical design employees who have been with Bonobos for more than a decade. “Those factors around talent and heritage and investment, that can vary widely,” said Dunn.

Dunn said it has a certain irony—if you care about the product, money will follow but the problem comes when you only care about the money. “Money has faces,” said Dunn, quoting one of his mentors. “All money looks the same, but it’s different depending on who you take it from. In this brand management world, that’s true as well.”

Glenn McMahon, former CEO of the luxury fashion brand St. John Knits and AG Jeans who also held senior executive roles at Giorgio Armani, Dolce & Gabbana, and other brands,  has watched the tension among brands and brand management companies play out for decades, and he says he thinks the industry is poised for new life. “People used to say brand management companies are where brands go to die,” he said. “That’s changed.”