Inside Licensing News and Notes, Aug. 10, 2018
Party City’s Toy City Pop-Ups Will Target Former Toys R Us Locations
Party City’s 50 Toy City pop-up stores will target former “top-tier” Toys R Us and Babies R Us locations as the party goods retailer seeks to expand its presence in the toy category, Party City CEO James Harrison told analysts.
While Party City has been testing sales of toys in about 20 of its larger stores for about two years, the pop-ups are designed to “take advantage of disruption” in the category, while “supporting the objective of providing the deepest most relevant product for consumers,” Harrison said.
The Toy City locations will be opened alongside Party City’s seasonal Halloween City stores this fall and carry product through the holiday season, Party City’s Ryan Vero said.
”We really will be focused on the top items and meeting the needs of the customer that shops for toys during the holidays,” Vero said.
While Party City manufacturers and distributes about 80% of the products stocked in its stores, it has no immediate plans to start producing toys, Harrison said. While there might be “certain elements” of toys that might lend themselves to Party City production, that is “way out in the future,’ Harrison said.
Meanwhile, Party City plans to open a store front on Amazon this fall, starting with Halloween costumes packaged in bags and later shifting to Christmas and New Year’s items. Party City will offer about 25% of its proprietary costume inventory through the Amazon store. “This will provide differentiation from everything else on Amazon,” Harrison said.
Overall, Party City’s net income rose 5.1% to $28.4 million in Q1 ended June 30 as revenue increased 2.9% to $561 million on a 1% gain in same-store sales.
Party City, James Harrison, CEO, firstname.lastname@example.org
Sports Direct Buys House of Fraser
Sports Direct agreed today to buy UK department store retailer House of Fraser for £90 million cash, just hours after the chain filed for administration (bankruptcy). Sports Direct, which operates 750 stores and is owned by billionaire Mike Ashley, didn’t detail its plans for House of Fraser. The department store retailer has 59 stores, 31 of which earlier were targeted to be closed under an earlier Company Voluntary Arrangement (CVA) with creditors. House of Fraser has been searching for a buyer since the Chinese firm C.banner pulled out of an agreement earlier this month after failing to raise the money needed for the acquisition. Sports Direct is Ashley’s vehicle for making investments in companies, having purchased stakes in fashion retailer French Connection, department store retailer Debehams and most recently, Iconix.
Sports Direct, Brandon Moore, VP Business Development, +44 34 4245 9200
Randa Accessories Seeking to Expand Proprietary Brands
Licensee Randa Accessories is seeking to expand its proprietary Exact Fit and Trafalgar brands of belts and wallets, while continuing to maintain its portfolio of more than 50 licenses, says Randa Accessories’ Sean Greene.
The Exact Fit brand targets mid-tier retailers such as Belk’s and Kohl’s and has been combined with licenses such the Kenneth Cole belts available at Macy’s. Each of the proprietary brands also sell direct to consumers via branded web sites, a strategy also being deployed for licensed goods such as Hanes and Jessica Simpson slippers, Greene said. Randa acquired the Trafalgar brand in buying the Trafalgar Co. in 2003 and developed Exact Fit internally.
Among its licensed brands, Randa will continue as a licensee for the Nautica and Nine West brands, both of which were purchased separately earlier this year by Authentic Brands Group, Greene said. But Randa ended its pact with footwear supplier Rockport, which filed for bankruptcy in May.
Meanwhile, Randa Accessories renewed its bid to buy Perry Ellis International, increasing its offer to $28.90 from $28 as it heightened the battle with Perry Ellis Founder George Feldenkreis for control of the company. Randa made its initial offer for Perry Ellis in July, a month after the company agreed to Feldenkreis’ $27.50 bid, which valued the company at $417 million. Feldenkreis launched his effort to take Perry Ellis private in February. Greene declined to comment.
Randa Accessories, Sean Greene, Licensing Dir., 212-212-276-8800, email@example.com
Delta Apparel Sees Growing Sales of Salt Life Beer
Delta Apparel has a growing appetite for beer. The apparel maker expects its licensed Salt Life beer will account for a “high single-digits” percent of the brand’s revenue in 2019 as distribution expands, CEO Bob Humphreys told analysts. Delta, which acquired the Salt Life brand in 2013, owns 60% of a joint venture it formed with St. Augustine, FL-based Ancient City Brewing. The beer will be available through 2,000 stores in Florida, including 400 restaurants, by early September. Delta will limit sales of Salt Life beer for the “foreseeable future” to Florida as the brewery builds manufacturing capacity. The beer was a “minor contributor” to Delta’s Q2 revenue, which increased 7.5% to $112.1 million in the quarter ended June 30. Delta’s branded revenue, which includes the Salt Life. Soffe and Coast brands, fell 2% to $22.5 million, partly owing to colder weather in April and May. Delta recently signed a license agreement with Swim USA Inc. for Salt Life women’s swimsuits and returned to internal design and development of eyewear from a third-party licensee, Humphreys said.
Delta Apparel, Deborah Merrill, CFO, 864-232-5200