CHEROKEE NET RISES WITH LICENSING DEALS
VAN NUYS, Calif. — Cherokee Inc. reported first-quarter earnings more than tripled to $1.7 million, or 21 cents a share, from $538,000, or 7 cents, a year earlier.
Revenues for the three months ended Aug. 31 rose 130 percent to $2.3 million from $1.1 million. In the latest quarter all revenues were generated from trademark licensing, while revenues in the year-ago period came 96 percent from licensing and 4 percent from discontinued operations.
In 1995, Cherokee ceased its manufacturing and distribution operations to focus on licensing the Cherokee brand to retailers for a variety of products, including apparel and accessories. .
Discussing recent developments, Cherokee noted that during the latest period it extended its retail license agreement with Brylane Inc. through June 2002 and expanded it to include Brylane’s men’s catalog, King Size, to the agreement. Additionally Cherokee said it amended its licensing agreement with Caldor Corp. to include men’s activewear and boys’ size 4-20 activewear and casual sportswear. Cherokee also added men’s denim, casual sportswear, activewear and furnishings and boys’ size 0-20 casual sportswear, activewear and furnishings to its manufacturing agreement with Dayton Hudson’s Target division.
Late last month, the firm announced it had entered into an exclusive licensing agreement in Canada with Zellers Inc. for women’s, men’s and children’s apparel, fashion accessories, cosmetics and home and recreational products.
The brand will be launched there in fall 1998 and run through Jan. 31, 2003. Cherokee said it will receive guaranteed revenues of $10 million during the initial term of the agreement.
Zellers, a division of Hudson’s Bay Co., operates 300 discount department stores in Canada.