California Apparel News

Tonny Sorensen is planning a comeback.

The chief executive of the Los Angeles–based multi-million-dollar brand Von Dutch Originals is looking to reposition the label, which skyrocketed to popularity after being embraced by pop-culture stars but later suffered through a withering backlash that threatened the future of the brand.

In the beginning of 2005, Sorensen limited production of the Fall 2005 collection in the United States. He also directed his sales team not to aggressively peddle the collection. In the beginning of 2005, Sorensen funneled most Von Dutch product to overseas accounts to grow the business around the world. He left much of Von Dutch’s American cupboard bare, so he could start with a clean slate on the company’s stateside look.

He then told his design team to go back to the drawing board and build a Spring 2006 collection that would confound popular expectations of the brand. He specifically demanded a reduction in the size of the giant Von Dutch logo, which had been seen on trucker hats and T-shirts worn by stars such as Britney Spears and Gwen Stefani.

The Spring 2006 collection is made up of 200 pieces featuring luxury items such as a hand-painted Italian leather jacket, polo shirts with a distressed treatment and hemp-cashmere denim with a $129 retail price point.

Retail expansion

While setting the stage for a reintroduction of Von Dutch in America, the 6-foot-6 Danish-born executive plans to reinforce the popularity of the brand globally by developing partnerships with franchisees who will build Von Dutch boutiques around the world.

By the end of November, a Von Dutch shop will open in Moscow, across the street from the Kremlin. A 400-square-foot Von Dutch store debuted in London in October. Another opened in Milan, Italy, in June. He plans to build more than 50 overseas shops, with locations in the Middle East and China, by 2006.

Domestically, the company plans to build more than 10 boutiques next year. It currently maintains a 3,000-square-foot boutique on Melrose Avenue in Los Angeles and a 5,000- square-foot store at the Third Street Promenade in Santa Monica, Calif.

Sorensen hopes to divide wholesale accounts among high-end boutiques, middletier department stores and the popular-priced retailers favored by teenagers. Sorensen is betting that this strategy could pole-vault the company from its estimated revenue of $55 million in 2004 to being a $1 billion company. He declined to give 2005 revenues.

Brand rebuilding

But making a comeback could be tough. Some retailers who first sold Von Dutch think the brand’s magic has disappeared due to celebrity-fueled hype.

“It’s a fine line to keep it desirable,” said Jaye Hirsch, owner of Intuition, a Los Angeles boutique that specializes in styles worn by celebrities. “Everyone wants what they can’t get. Once a brand becomes mainstream, people lose interest.” Intuition sold Von Dutch during its first rush of success. Hirsch said that she wouldn’t sell it again.

Other retailers are bullish on the brand’s future. Johnathon Vasquez will be selling Von Dutch at his boutique, Terra, which recently opened on Los Angeles’ West Third Street, where shops pride themselves on competing for the most unique and independent labels.

“I’ve seen what Von Dutch accomplished,” Vasquez said. “They’re very good at what they do. Now they’re going to stir things up. They’re taking their very cool jean, and I think they’re going to top it.”

Sorensen said the company would succeed because Von Dutch executives have grown wiser.

Rocky history

When Sorensen joined the company in 2001, the business was popular among hot-rod enthusiasts and earned between $3 million and $6 million from sales of T-shirts bearing the designs of Kenny “Von Dutch” Howard. In the 1950s and 1960s, the artist developed a counterculture reputation for his wild designs, such as an eyeball with wings.

Sorensen and his partners helped put Von Dutch products in the hands of celebrity stylists, and by 2003, a seemingly endless parade of pop stars and lesser celebrities clamored to be photographed in Von Dutch products.

Sales for the privately held company skyrocketed to $35 million in fiscal 2003, and $55 million in 2004. Counterfeiters smelled opportunity and knocked off an estimated $50 million of Von Dutch product in 2004, according to Sorensen. He currently retains one in-house attorney to direct the efforts of three law firms to combat the counterfeiters.

The brand also suffered a strong backlash from the public. Celebrity magazines published fewer photos of stars wearing Von Dutch clothes. Adjacent to displays of Von Dutch, retailers were selling parody T-shirts bearing slogans such as “Von Pig” and less delicate spoofs of the brand name.

Although Sorensen took the spoofs in stride, he was caught off-guard by the company’s rapid growth. “We caught a wave, but we didn’t understand it was a tidal wave,” Sorensen said from his company offices on Los Angeles’ La Brea Avenue.

Dissension within executive ranks threatened to tear the company apart. Designer Christian Audigier left in September 2004 to start his own brands, Ed Hardy and Christian Audigier, and is currently involved in a lawsuit with Von Dutch Originals. Attorneys for Sorensen settled a lawsuit over the ownership of the company with former company president Michael Cassel in February 2004 for an undisclosed amount. (Cassel has since founded the Stronghold denim line.)

Likewise, the company settled out of court a lawsuit brought by co-founder Robert Vaughn. The suit concerned ownership and licensing matters. Since the settlement in October 2004, Vaughn started clothing line FTW LLC.

Licensing the lifestyle

While Sorensen is scaling back hype surrounding the Von Dutch brand, he is looking for new opportunities for the label—and not necessarily within the apparel business.

The company partnered with more than eight licensees to produce items as varied as stationery, cellphone covers and energy drinks made by Las Vegas–based Rockstar Inc. There are also custom motorbikes, which cost $40,000–$150,000.

“It’s not a clothing brand,” Sorensen said. “It’s a lifestyle brand. The trucker hat was hot a couple of years ago. It could be the energy drink next year.”

Licensing a diverse array of products can do wonders for the brand or backfire, according to Charles Riotto, president of the International Licensing Industry Merchandisers’ Association. “There is an art to doing this,” Riotto said. “It can be a great vehicle for building brand awareness, but you still have to have a viable product to start with, and good management.”

According to Riotto, one company that built a successful track record in licensing is Daimler-Chrysler’s Jeep brand. Best known for making Jeeps, the brand has also licensed a range of products, including baby strollers, camping gear, track jackets, bicycles and coffee mugs. Its licensed products were taken seriously because they had a rugged feel that consumers associated with the core product. If consumers don’t accept the cachet of a product, they won’t buy its related products, Riotto said.