EDITOR’S NOTE: This story has been changed from the original to reflect that People’s Liberation did not drop its higher priced premium denim line when it launched a new, more value-priced line. Also, the change in stock price was corrected.
People’s Liberation Inc. on Friday said it will change its name and business model in conjunction with a $14.5 million infusion from a private equity firm.
The Los Angeles company, known for its high-priced designer jeans, said net proceeds would be used primarily to acquire brands and facilitate the company’s transition to a brand-management and licensing business as opposed to a traditional apparel manufacturer. The company will change its name to Sequential Brands Group Inc.
People’s Liberation faltered during the recession as consumers became less willing to pay $200 or more for its premium denim. In response, the company came out with an additional, lower priced denim line.
Its new financial partner, Tengram Capital Partners of Westport, Conn., has committed to buy convertible debentures, preferred stock and warrants. The firm already has purchased $3 million of debentures, and has agreed to purchase a minimum of $11 million additional in debentures in the next few weeks, the company said.
The company currently owns two brands, People’s Liberation and pop star Justin Timberlake’s William Rast. It is licensing these brands in a variety of categories to retailers, wholesalers and distributors both domestically and overseas.
"Our new corporate name … 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,” said Chief Executive Colin Dyne in a statement.
Tengram co-founder and Managing Partner William Sweedler, formerly of Iconix Brand Group, will join the company as chairman. Matthew Eby, a Tengram co-founder and managing partner, and Richard Gersten a Tengram partner, also will join an expanded six-member board.
Tengram invests or acquires public and private consumer companies, and has investments in Ellen Tracy, Caribbean Joe and Carlos Falchi.
Shares on Friday closed down 11 cents, or 24 percent, to 35 cents on the Pink Sheets, after soaring more than 800 percent on Thursday.