DEVIL IN THE DETAILS: Cherokee Brand Group’s Henry Stupp and Gordon Brothers’ Ramez Toubassy each believe a hands-on approach is a better working model for licensors and their licensees, but how they take that idea to expand their respective businesses is up for discussion.
The two, having just completed a financial transaction, are now figuring out how best to strategically collaborate on future projects. And having just started those discussions, there’s no definitive agreement yet that defines just what that collaborative partnership will entail. Those projects could include acquisitions, but initially will probably focus on how to expand both companies’ portfolios globally. That includes utilizing Cherokee’s proprietary turnkey platform, Toubassy said.
According to Stupp, the former wholesaler about six years ago developed Cherokee Development Group. It works directly with factories, although Cherokee doesn’t take ownership of any inventory. The group also works with licensees on the design of product, and sources a combination of raw goods and materials for its product lines. Stupp, Cherokee’s chief executive officer said, “They are not required to buy into our sources, but know that they can purchase goods from an already vetted supply chain [to] deliver a turnkey product that’s spec right.” He added that the process speeds the manufacturing component, allowing licensees to “market faster than our peer group.”
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Toubassy said the two will also work with his colleague at Gordon Brothers, Rafael Klotz, who is senior managing director, international, and has an expertise in brand acquisitions and disposition.
While other brand management firms say they have a hands-on approach with the assets under their respective umbrellas, Stupp said Cherokee’s focus has been on investing for growth — one example is scaling a brand for an overseas market — so as not to have declining revenues for each brand and then having to “buy another brand to deliver topline” results.
While Stupp said the two will “benefit from each other’s Rolodex,” he also said future acquisitions could be jointly owned, or have Cherokee buying a brand Gordon Brothers owns or a new brand that it wants to add to its umbrella, with Gordon Brothers providing the financing.