By
with contributions from Kaname Murakami
 on February 3, 2010

TOKYO — Move over Pharrell Williams. Music and streetwear impresario Nigo has a new creative partner: Hello Kitty.

The designer behind the cult brand A Bathing Ape has just struck a licensing deal with Sanrio, the parent company of Hello Kitty, to develop its Baby Milo character into a range of novelty items and accessories. But the companies’ partnership could conceivably extend well past vinyl tote bags and plush toys. Representatives on both sides indicated — albeit in a half-joking manner — that if the pair take a real shine to each other, Sanrio might even consider investing in the edgy label known for its colorful sneakers, quirky T-shirts and camouflage jackets, mainly for men.

Ray Hatoyama, Sanrio’s San Francisco-based chief operating officer, said the Japanese company would be “potentially” interested in buying a stake in Bape’s business. “Maybe,” he laughed, adding his job’s responsibilities include mergers and acquisitions. “I’m open to anything.”

Meanwhile, Bape’s founder and designer, Nigo, whose real name is Tomoaki Nagao, acknowledged he’s open to the idea of selling a stake in his company, Nowhere Co. Ltd., if the right opportunity comes along.

“I am always flexible. For example, I might think it to be a good idea if Sanrio were to say, have a 40 percent stake,” he said with a chuckle.

Nowhere developed the Baby Milo character, a young gorilla with a circular head and an orange face, in 2000 and has featured his likeness on appareland accessories for both children and adults.

“In the character goods business, Sanrio is a pro among pros. I’ve takenreally good care of the Baby Milo character thus far, and with this new opportunity I would like to see him become a [Japan-wide] character,” said Nigo, who also runs his own record label as well as the Billionaire Boys Club and Ice Cream clothing brands in partnership with Williams.

Hatoyama said he thinks Baby Milo will help Sanrio, known for its girly cast of characters, to win over more boys and young male fans.

Sanrio’s initial product lineup, which will be expanded over time, consists of about 40 items, including children’s flip-flops, vinyl tote bags, a tent and a folding chair. The collection, which bows in April, will be sold at about 300 Sanrio stores and other sales points in Japan, but not at Bape’s own stores.

Hatoyama said Sanrio and Bape would like to expand the products to international markets at some point, but a time line has not been established. Sanrio is expecting the line to generate 3 billion yen, or about $33 million, in retail sales in three years, the executive explained. A Sanrio spokesman said the licensing agreement is open-ended and does not have a fixed expiration date.

Hatoyama and Nigo said they are also considering opening a store for the new line of licensed goods at some point soon, but they are concentrating initially on building distribution through Sanrio’s existing retail channels.

Sanrio and Bape began their relationship in August when the two companies produced a select run of cobranded items like T-shirts, coffee mugs and tote bags for Isetan department store.

In terms of the overall Bape business, a company spokeswoman said Nowhere posted sales of 6.17 billion yen, or about $67.4 million, for the year ended Aug. 31, 2009. The brand recently revealed that it’s tapping into the more formal side of fashion with a capsule collection of men’s suits, ties, shoes and other items for spring. The line will be sold exclusively at select United Arrows stores in Japan.

Nigo acknowledged he’s felt the effects of the economic crisis, but claimed his business is bouncing back.

“Yes, we did see a drop last year although it is not crippling, like a 10 percent fall. And at the end of the year, we saw a return to normal-level sales,” he said. “Even at the outlet store that we opened to get rid of extra stock, it is difficult to keep anything on the shelves.”

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