BOSTON — After sending Carole Little to TJX Cos., Cherokee Inc. wasted no time in finding homes for the remaining six trademarks from defunct CL Fashions Corp.
This story first appeared in the January 14, 2003 issue of WWD. Subscribe Today.
The Van Nuys, Calif.-based brand broker said Monday it has inked a five-year licensing deal with Santa Barbara, Calif.-based Gilrichco Holdings for the Chorus Line, All That Jazz, Jazz Kids, Jazz Sport, Tickets and Molly Malloy trademarks. After five years, if certain targets are met, Gilrichco will own the misses’, children’s and junior sportswear marks, said co-founder and ceo Steve Gilman.
In December, Cherokee licensed the Carole Little mark — thought to be the most valuable of the lot — exclusively to Framingham, Mass.-based TJX, as reported. The off-price giant said it expects branded product to arrive in stores in mid-2003.
According to chief financial officer Kyle Wescoat, Cherokee will help Gilrichco pursue retail-licensing opportunities for Chorus Line, a misses’ brand, and All That Jazz, a junior mark.
Cherokee could stand to profit twice — through a broker’s fee and a license fee — if it turns around and helps Gilrichco license the lines to a retailer. Cherokee typically receives a broker’s or finder’s fee in such cases. Wescoat declined to confirm or to discuss financial details.
Gilman said inking a deal with a midtier retailer is a top priority.
“We’d like to have a deal signed in the next 60 days,” said Gilman, adding that co-founder Richard Gilman and chief operating officer David Bergeson are spending this week meeting with retailers here and in New York.
The Oscar buzz surrounding the remake of “Chicago” and media attention on Bob Fosse — the Oscar-winning director of “Chicago” and “All That Jazz” — is a “happy accident” that could potentially boost consumer interest in the labels, Gilman said.
It’s likely that Gilrichco, a $100 million holding company that already owns a handful of trademarks and small companies, would provide a retail licensing package that funneled manufacturing back to its stable of subsidiaries. The company owns Couture Merchandise Inc. by J. Park, a men’s leather outerwear company; Avalon Blu, which produces contemporary dresses and sweaters under several labels, and Rare Threads, a recently acquired producer of updated misses’ sportswear. The company also has a strategic alliance with STS Apparel, a Miami-based private label knitwear manufacturer.
“We will be going to the retailer not only with concepts for the trademarks, but with the force of a manufacturing network behind us,” Gilman said. “One of our main strategies is to own a collective of vendors. We don’t want to design the lines, but we want to own the companies that design or license the lines.”
The company is also planning to support All That Jazz and Chorus Line with a seven-figure advertising campaign to launch in late spring.
Cherokee purchased the CL Fashions trademarks at a bankruptcy auction late last year for slightly more than $2 million, according to industry sources. Wescoat declined to project when the company would recoup its investment, but observers noted that the relatively low purchase price and the speed with which the company has placed the marks with active producers bodes well for future profitability.
Cherokee, which is relatively cash-rich, according to its balance sheet, is likely poised to pick up other languishing apparel trademarks.
“There are a lot of good brands attached to troubled businesses, where companies have had difficulty reacting to the shift to sourcing offshore,” Wescoat said. “We have an eye out for those brands to acquire them at the right price and do something with them on the licensing front.”