Cherokee Inc. announced Tuesday that it has signed an exclusive licensing agreement with Essence Communications to help get the Essence magazine brand onto the shelves of major retailers.
Van Nuys-based Cherokee licenses brand names it owns to retailers such as Target Corp., which then source apparel and footwear products on their own. Cherokee also acts as a go-between helping other companies market their brands to retailers.
Cherokee will help Essence, the African American lifestyle publication, place its brand name onto clothing labels and other products.
"We'll go to the top 20 retailers, present 'Essence the brand' and then work with the store and magazine to get the best deal possible," said Anthony Damiani, Cherokee's vice president of brand development.
Damiani said Cherokee hasn't yet focused on any specific retailers. While financial terms of the agreement were not disclosed, "We don't get paid unless we successfully place the brand," he said.
Representing other brands has developed into a lucrative sideline for Cherokee. In next two years, the company expects substantial royalty revenues by helping introduce the House Beautiful brand in May Department Stores, and Carole Little in TJ Maxx and Marshalls stores, which are owned by TJX Cos.
Chairman and Chief Executive Robert Margolis, who founded Cherokee's apparel division in 1980, transformed the manufacturer into a licensor of private label brands a decade ago. That happened just as discount retailers were eliminating apparel middlemen the wholesalers by turning to private labels and designing their own products.
With a handful of well-known brands including Cherokee, Sideout, Chorus Line and All That Jazz, the company has parlayed its licensing expertise into strong royalty earnings from Target, May Department Stores and Mervyn's.
Cherokee's share price was down 1.3 percent at $33.05 in midday trading on Tuesday.
Staff reporter Kate Berry contributed to this story.
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