Cherokee Renews Target Deal
Van Nuys, Calif.-based Cherokee Inc. announced that Target Corporation plans to continue its licensing agreement to carry the company’s branded apparel for men, women, children, footwear and accessories through January 2005.
Robert Margolis, chairman and chief executive officer of Cherokee Inc., said, “We are pleased that Target Corporation has exercised its option [to continue to sell the Cherokee brand].”
Cherokee’s relationship with the Minneapolis, Minn.-based retailer began in the mid-1990s, when the apparel maker began testing its retail-direct licensing program. Through the program, Cherokee licenses its name to a retailer, which designs, sources, produces and sells Cherokee product in its stores. Cherokee has similar agreements with retail giants Zellers in Canada, Tesco in the United Kingdom and Ireland and Carrefour in Europe.
Cherokee is projecting that worldwide sales will reach $3 billion this year.
“We are very fortunate to have partnered with them when we introduced the retail-direct model,” said Margolis. “This template has now become an integral part of worldwide retailing.”
For the first nine months of the agreement, which began Feb. 1, 2002, Cherokee’s branded apparel generated more than $17 million in royalties, which translated into retail sales of $1.4 billion, said Cherokee’s chief financial officer, Kyle Wescoat.
Cherokee acquired CL Fashions’ trademarks—Carole Little, CLII, St. Tropez, Chorus Line, All That Jazz, Tickets and Molly Malloy—from California Fashion Industries and Chorus Line Corp. for approximately $2 million in December 2002. The company struck a licensing deal with TJX Companies, parent of discount retailers TJ Maxx and Marshalls, for the Carole Little brands. Cherokee reached another licensing deal with private-label manufacturer Gilrichco Brands for the Chorus Line brands. —Claudia Figueroa
