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LOS ANGELES — After years of resisting offers to relinquish any piece of his company, Richard Tyler has struck a deal with Lucky Brand Dungarees co-founders Gene Montesano and Barry Perlman, and former Earl president Joe Krafka. The pact is designed to give his year-old secondary line Tyler a greater market presence.
Operating under the new holding company, Red Tiger, the investors have teamed up with the designer to form Tyler LLC.
Krafka is the new company’s president. Montesano and Perlman are being described as “passive investors.” Terms of the deal were not released, however, Red Tiger’s stake in Tyler LLC is considered significant. Analysts estimate the start-up capital at between $250,000 and $500,000 based on conservative first-year sales estimates of $4 million.
Richard Tyler Couture and the Richard Tyler Bridal collections are not a part of the Red Tiger deal and will remain under the Tyler Trafficante Inc. umbrella, which Tyler and his wife, Lisa Trafficante, founded in 1987.
Investors have looked at Tyler’s business over the years, especially those years that were leaner than others. The company’s sales have perennially hovered around $15 million. Yet Trafficante has been reluctant to open the door to outside investors.
Montesano and Perlman have spoken to Krafka and Tyler separately several times during the last five years, but it was not until November that conversations began in earnest and Krafka and Tyler met.
“He’s the boss,” Tyler said of Krafka. “I’ve known Gene and Barry for years and we get on really well.”
Interviewed late Monday night at the new Tyler LLC offices downtown, the designer called the deal “a no-brainer.”
Red Tiger has leased about 20,000 square feet in the building. Much of the space will eventually be taken up by the Tyler line, Krafka explained. The holding company has reportedly been pursuing other investment opportunities, but they are said to be on hold now that the Tyler deal has been completed.
Red Tiger’s cash infusion will bring an infrastructure to the Tyler line, which had been plagued by delivery, fit and production issues in its first two seasons. The line is sold in about 30 doors, including Henri Bendel and selected Saks Fifth Avenue and Bloomingdale’s locations. Manufacturing will continue here and in Asia with prices ranging from $150 for trousers to $400 for a leather jacket.
Krafka and Tyler hope to double distribution in the first six months. The line will be relaunched on Feb. 11 at the Bryant Park tents in New York during a 5 p.m. show.
Tyler and the line’s co-designer Erica Davies will continue to oversee the creative end from the Monterey Park Tyler Trafficante studio. Showrooms are being set up in the Tyler LLC offices here on Alameda and Third Streets as well as in Tyler’s New York office in the Meatpacking District.
The Red Tiger agreement includes a men’s line for fall 2004. There may be a tailored denim jacket or slim denim trouser in the fall 2003 Tyler women’s collection, but nothing approaching the standard five-pocket style that constitutes a jeans license.
In addition to the Red Tiger agreement, Tyler Trafficante recently inked a footwear license with Los Angeles-based The Fashion House to produce the Tyler and Richard Tyler Couture lines. A handbag license is also being reissued.
The designer said he and his partners are debating whether to show Tyler along with the Richard Tyler Couture collection during Los Angeles Fashion Week in April.
“I know what the line should look like, but I haven’t been able to take it to where it should go,” Tyler said. “With Joe, Gene and Barry running it I feel it can reach its potential.”