Paul Frank Industries Inc. is set to keep its designers in Costa Mesa as business operations move to Los Angeles with the company’s acquisition by Saban Brands LLC.
Much of Paul Frank’s business development, licensing and administrative operations are moving to Saban’s Century City headquarters, according to Elie Dekel, president of Saban Brands.
Paul Frank’s 20 or so designers, who work the company’s trademark cartoon characters onto clothes, wallets, headphones, sunglasses, dolls and others products, are set to stay in Costa Mesa.
The artists do about 1,200 designs a year.
“Saban has been very mindful of the creative team in the office and decided not to disrupt the secret sauce,” said Paul Frank Chief Creative Officer Ryan Hauser, who’ll keep his title after the deal closes.
Paul Frank, known for Julius the Monkey and other characters, designs clothes and other products and licenses them to other companies.
Last week, media mogul Haim Saban said he bought Paul Frank through an arm of his Los Angeles-based private equity firm Saban Capital Group Inc.
The business is set to fall under Saban Brands, which Haim Saban formed earlier this year with a $500 million fund to acquire brands that have “stood the test of time and remained authentic,” Dekel said.
Financial terms of the deal were not disclosed.
Market watchers estimated Paul Frank sold for about $50 million.
Saban
Saban is best known for making “Power Rangers” an American hit. He sold his TV production company to Walt Disney Co. in 2001 and this year paid $100 million to buy back “Power Rangers.”
It’s unlikely Paul Frank’s designers will work on “Power Rangers” or other Saban brands, according to Dekel.
“I don’t know if we’re going to be crossing brands necessarily,” he said. “However, Saban Brands is still in the formation stages and we haven’t had a creative group until now. We may look into tapping into the talent pool here and seeing how that (could be) added to other Saban activities.”
Paul Frank has been run by Hauser, Chief Executive John Oswald and investor Mossimo Giannulli.
Namesake cofounder Paul Frank Sunich started the company in 1995 and left in 2005 after a falling out with his former partners. He sold his stake to Mossimo in 2007.
Oswald is expected to leave the company. Hauser will run creative operations out of Costa Mesa and report to Dekel.
Giannulli is expected to stay on as an adviser to the Costa Mesa design operation. He has been the driving force at the company in recent years, moving it away from a conventional apparel company model to one based on designing for licensees.
The move had parallels to Giannulli’s own deal struck in 2000 with Target Corp., which helped get his Santa Monica-based Mossimo Inc., now part of New York’s Iconix Brand Group Inc., out of hard times.
Paul Frank’s principals had been looking to sell to gain cash for growth, according to reports. The company hired New York-based investment bank Guggenheim Partners LLC in June to explore a possible sale, according to reports.
About a year ago, Los Angeles-based investment bank Sage Group LLC brought Paul Frank to Saban’s attention and worked on the deal.
“Paul Frank was one of the first brands we were introduced to while creating that list of the top premium brands as targets,” Dekel said. “It was a very opportune time in both of our histories to come together.”
Characters
Besides the iconic Julius, Paul Frank has more than 150 characters including, Worry Bear, Sheree the raccoon and a whimsical skull and cross bones dubbed Skurvy, its second most popular character after Julius.
The appeal of Paul Frank’s characters brought Saban Brands to approach Paul Frank earlier in the year about a sale.
“Paul Frank appeals to men, women, kids and young and old,” Dekel said. “It has a broad appeal with all types of consumers, which is very rare for brand to have.”
Saban is expected to expand Paul Frank, particularly in other countries.
The obvious question: will Saban turn Paul Frank’s characters into a TV show or movie?
“We will look at all of the potential media platforms for all of the characters,” Dekel said.
