California Apparel News

A court battle is brewing over the licensing agreement that gives Blue Concept LLC, a Los Angeles company headed by Paul Guez, the right to use the Elvis Presley name in a new clothing line debuting in late August at MAGIC International in Las Vegas.

The Icon Licensing Group, based in New York, filed a lawsuit in Los Angeles Superior Court in April accusing Guez and Blue Concept of not honoring their bargain. Specifically, the lawsuit maintains that Guez, in an oral agreement, had promised to pay Icon Licensing $100,000 upon signing the licensing agreement and 1 percent of the net shipments for the life of the license for all goods manufactured under the agreement.

Guez, through his attorney, John Meyers, denied any wrongdoing. Currently, the attorneys are in the discovery phase, interviewing people. No court date has been set.

According to the lawsuit, Icon—headed by Robert Levin, Stuart Scher and Larry Zeresky—had a conference call with Guez on April 25, 2004, when the Blue Concept executive agreed to pay Icon’s brokerage-fee commission. But after a licensing agreement was signed between Elvis Presley Enterprise Inc. and Blue Concept, Guez notified Icon that he would not be paying a brokerage fee because the deal had not been really brokered by Icon, the lawsuit said.

“We are trying to settle this, but we’re not making much progress,” said Howard Miskin, the New York attorney representing Icon. “We claim there was an agreement when we brought Guez to Elvis. There were promises made that never materialized.”

Miskin said that even though there was no formal written agreement, there were e-mails and correspondence supporting Icon’s claim.

Blue Concept is a privately held company that develops and markets several blue jeans labels, including Taverniti So, U Denim, Duarte Jeans, Grail and the Elvis line.

Guez has been a major player in the denim business ever since he launched Sasson Jeans in the 1970s. Today, he is a major shareholder in the Innovo Group Inc., the Los Angeles maker of Joe’s Jeans and other labels. Last year, the company had a net loss of $9.5 million on $104.7 million in sales. With his brother Hubert, he owns Azteca Production International, a private-label denim factory in Mexico.

In May, Guez formed Blue Holdings Inc., a publicly traded company formed through a reverse merger with Marine Jet Technology Corp., a shell corporation. Guez is the chairman, chief executive, president and a major shareholder of Blue Holdings, which is traded over the counter.

Blue Holdings started out designing, manufacturing and marketing Antik Denim, the high-end blue jeans label sold at Bloomingdale’s, Neiman Marcus, Saks Fifth Avenue and other major stores. In early July, Blue Holdings signed a 10-year licensing agreement with Yanuk jeans, which is wholly owned by Paul Guez. Designer Ya-el Torbati and Guez’s daughter, Anouk, launched the line in early 2003. Both have since left the label, leaving Benjamin Taverniti as Yanuk’s principal designer.

As part of the 10-year licensing agreement, Guez receives a royalty of 6 percent of all net sales on all licensed products.

—Deborah Belgum