Costa Mesa-based Paul Frank Industries Inc. has granted rights to the clothing company’s designs and trademark cartoon characters to Australia’s Creata and confirmed that designer Mossimo Giannulli has become an investor in the company.
Late last year, Paul Frank officials denied speculation that Giannulli, who got his start in Orange County and now is known for his clothes sold by Target Corp., had taken a stake in the company.
Terms of the licensing deal weren’t disclosed.
Creata is expected to strike licensing deals for Paul Frank clothes and accessories and look for new ways to license the company’s brand, according to a statement.
Paul Frank’s design and marketing team is expected to continue working on products with help from Creata. Paul Frank also will continue to run its stores and supply clothes and accessories to department stores and boutiques.
Sydney-based Creata is known for its work promoting products from companies such as McDonald’s Corp., Kellogg Co., Nestl & #233; SA and Coca-Cola Co. The company does brand strategy, merchandising, administrative services, packaging design, entertainment marketing and other services.
The deal is the latest twist for Paul Frank, which has about $40 million in yearly sales and is known for its trademark Julius the monkey and other characters.
In 2005, namesake designer Paul Frank Sunich left the company and later sued his former partners, claiming to be fired unfairly and for other reasons.
The lawsuit was settled with Sunich selling his stake in the company. Giannulli and other investors bought Sunich’s stake.
Last year, Paul Frank laid off some 20 workers as part of a restructuring after sales growth didn’t meet expectations.
The Creata deal is bringing more layoffs set to play out during the year. Some workers could be taken on by licensees, a spokeswoman said.
As of late last year, Paul Frank had about 100 employees.
In an interview last fall, President Ryan Heuser said the company was looking at licensing its characters for a range of products.
“We look to great companies like Disney, Sanrio and Apple to apply their methods directly to our business model,” he said.
