BOSTON — After a disastrous merger and much-publicized corporate meltdown, Carole Little and Chorus Line have been reunited under brand broker Cherokee Inc.’s umbrella.
The Van Nuys, Calif.-based Cherokee said Wednesday it has acquired seven trademarks once held by CL Fashions Corp. and will license the most valuable trademark, Carole Little, exclusively to Framingham, Mass.-based TJX Cos.
A TJX spokeswoman said products will arrive in stores in mid 2003. Carole Little is a "great brand to add to our stable and the small amount of private label business we do," she said.
Cherokee chief financial officer Kyle Wescoat said the five-year deal with TJX allows the off-price retailer to produce Carole Little apparel and footwear, and to distribute it through any of its store divisions in the U.S., Canada and Europe. TJX operates the T.J. Maxx and Marshalls chains in the U.S., the Winners chain in Canada and T.K. Maxx stores in Europe.
"Everyone knows Carole Little and what Carole Little has historically done," said Wescoat of the careerwear label that approached $400 million in sales during its late-Eighties heyday. "We think it’s a great platform for growth and we didn’t have to pay extraordinarily much" for the trademarks.
Industry sources estimated Cherokee paid roughly $2 million for the labels, sold at a bankruptcy auction. Along with the Carole Little mark, Cherokee also acquired trademarks for Chorus Line sportswear, CL II plus-size careerwear, Molly Malloy misses’ dresses, Saint-Tropez West moderate dresses, Tickets denim dresses and junior sportswear brand All that Jazz. Cherokee is actively pursuing distribution opportunities for these labels, Wescoat said.
For the first nine months of the year, TJX earned $424.1 million on sales of $8.48 billion.
California Fashion Industries Inc., Carole Little’s parent company, merged with Chorus Line in July 2000. Four months later, unsecured creditors filed a Chapter 7 involuntary bankruptcy petition against the merged companies.
Lazard Frères retail analyst Todd Slater said the Carole Little-TJX deal follows trends of large retailers angling for product exclusivity "wherever and whenever possible," although he didn’t view it as signaling a strategic shift toward "house brands" for TJX."Like many former department store labels that got squeezed out, Carole Little has top-of-mind brand equity," he said. "It’s an ideal candidate for exclusive distribution downstream."
In recent years, a number of somewhat mature brands have been jump-started by moving to mid tier or mass distribution. Bisou Bisou recently sewed up an exclusive deal with J.C. Penney Co. Other such alliances include Joe Boxer at Kmart, Faded Glory at Wal-Mart, and Mossimo and Cherokee at Target.
Cherokee, which specializes in brokering licenses with large global retailers, struck the deal for its own brand and for Mossimo.
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