People’s Liberation Gets New Name and Investor
People’s Liberation, the Los Angeles company that makes the William Rast label in conjunction with celebrity Justin Timberlake, is changing its name and its business model.
After a $14.5 million infusion of funds from Tengram Capital Partners, the denim and casualwear company will now be called Sequential Brands Group Inc. It will start acquiring other brands and transition from an apparel maker to a brand management and licensing business, much like Cherokee in Los Angeles and Iconix Brand Group in New York.
The company also intends to license its own William Rast and People’s Liberation brands in a variety of categories to retailers, wholesalers and distributors.
“Our new corporate name, Sequential Brands Group, symbolizes our primary goal of owning a sequence of strong, well-diversified brands across multiple consumer segments, including apparel, home furnishing, sporting goods, electronics, packaged goods, food and beverage,” Colin Dyne, the company’s chief executive, said in a statement. “The business model was honed by our new chairman, William Sweedler, before, during and after his employment with Iconix Brand Group. He will be a great value to us as chairman of the board as we move forward to grow our own brands and acquire others.”
Sweedler is co-founder and managing partner of Tengram Capital Partners, a private-equity firm focusing on leading middle-market consumer and retail companies that own strong, recognizable brands. Tengram and its predecessor fund, Windsong Brands, have investments in Robert Graham, Ellen Tracy, Caribbean Joe and Carlos Falchi.
Tengram has already bought $3 million in debentures from People’s Liberation and has agreed to purchase a minimum of $11 million of debentures in the next few weeks.
People’s Liberation in recent years has had a difficult time making a profit. Last year, after more than a year of litigation and accusations, the company resolved a contract dispute with mall-based retailer Charlotte Russe Inc.
According to court documents, People’s Liberation had signed a three-year agreement to exclusively provide its People’s Liberation label of clothing and accessories to the San Diego–based chain of 560 stores that caters to women ages 15 to 35. The value of the three-year contract, signed Dec. 15, 2008, was originally pegged at $65 million.
When new owners took over Charlotte Russe, they rescinded the contract, which led to the lawsuit. An undisclosed settlement was reached one year ago.
People’s Liberation is a publicly traded company whose stock was trading on Feb. 10 at around 35 cents a share. The stock’s 52-week high was 51 cents, and its 52-week low was 3 cents.
In the nine months ended Sept. 30, People’s Liberation had a net loss of $2.6 million on revenues of $7 million, compared with a new loss of $3 million on $14.8 million in revenues for the same period in 2010.—Deborah Belgum
