California Apparel News

Paul Frank Industries is going global.

The Costa Mesa, Calif.–based company burst into California’s apparel scene in 1997 with designer Paul Frank’s signature creation: Julius, the pie-eared cartoon chimp who adorned wallets and T-shirts. This year, the company is undergoing the biggest international rollout of retail stores in its seven-year history, according to Pete Searson, international sales manager.

In January, Paul Frank opened a 1,000-square-foot store in Athens, Greece. The company plans to build similar stores in Berlin; Milan, Italy; Seoul, South Korea; and Dubai, United Arab Emirates, and a second store in Athens by late 2004.

Searson also confirmed that the company was in talks to build stores in Melbourne, Australia; Barcelona, Spain; Stockholm, Sweden; Amsterdam, Netherlands; Paris and Hong Kong. He forecast international sales will constitute from 23 percent to 32 percent of the company’s 2004 revenue.

International sales have been steadily increasing for Paul Frank since 2001, when the company opened one store in Tokyo. In 2003, international sales made up 23 percent of the company’s sales. In 2002, when Paul Frank opened a store in London and a few more in Japan, international sales represented 12 percent of the company’s volume.

Paul Frank’s accessories and apparel have been distributed internationally since the company’s founding. Searson said signature stores usually prove to be silver bullets in building the brand abroad. Previously, the brand was only sold at specialty stores such as Selfridges in London and Collette in Paris.

“They buy a better representation for the line,” Searson said of the signature boutiques. “Rather than just buying apparel with Julius, they buy a greater assortment of Paul Frank clothes and accessories.”

Frank’s contemporary collections, the Men’s Department and the recently launched Her House (see related story here), do not feature Julius.

The overseas Paul Frank stores are partnerships between the company and its foreign distributors. The foreign partners pay Paul Frank design and product costs, as well as a quarterly royalty fee. Searson declined to state the amount of the royalty fee.

Richard Giss, a retail analyst for the Los Angeles office of Deloitte & Touche, said there is no typical sum for royalty fees and that much of it depends on the value of the trademark and the level of support the licensor provides.

“First and foremost, you have to make certain you protect the value of your trademark,” Giss said of foreign retail ventures. “You want your customers to have the same experience they have over here. The key is you want consistency, and it’s difficult to achieve.”

Paul Frank attempts to keep a tight rein on its image through design. All store fixtures for the overseas boutiques are built and designed in California, typically by designer Paul Frank and Long Beach, Calif.–based retail designer Craig Bouman.

Searson, who met Paul Frank President Ryan Heuser when both worked at Costa Mesa–based Mossimo Inc., became Paul Frank’s Northwest representative in 1998. The company created his international sales position 18 months ago.

The company is also in talks to open stores in Las Vegas, Boston and Miami that would join the seven Paul Frank stores currently doing business in the United States. The line is also carried in Nordstrom, Bloomingdale’s and Macy’s West.

Searson said Paul Frank’s apparel eventually may appear in European department stores, but it may take time.

“We waited a few years to do business with the big boys in the United States,” Searson said. “It helped create demand.” —Andrew Asch