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Ryan Heuser on changes at Paul Frank

By Tiffany Montgomery
March 12, 2008 2:59 PM

As Paul Frank Industries switches from an in-house business model to a licensing strategy, big changes are happening at the Costa Mesa company.

Last week, the company announced it had sold world-wide licensing rights to Creata, a brand management company best known for its work in making toys and games, according to Creata's Website. As a result, by the end of November, 10 to 15 employees of approximately 100 will remain on the local Paul Frank team, spokeswoman Nancy Carlson said. That team will retain responsibility for design and marketing and Paul Frank's retail stores.

In the meantime, Paul Frank executives are working to find employees jobs with Creata's licensee partners, Carlson said. A sad day is expected Friday as the one of first groups of employees, about 10 people, are let go, she said. Those leaving are being provided severance and career counseling.

Paul Frank co-founder and president Ryan Heuser answered some questions about the changes.

What was appealing about the licensing model?

"We have built an amazing brand with a global icon with Julius the Monkey over the last decade. However we feel like we are just starting to get the word out about our brand and feel there is so much to accomplish. By leveraging licensing partners, we can offer a wider, more diverse product offering which will not only service our existing customers but allow us access to entirely new types of distribution through some products we will eventually be making.

"Licensing also provides us with expertise in quality controls, better pricing and margin for retailers and on-time deliveries because each of our new partners will be specifically focused on what they do best. In turn, it will allow us to focus on what we are best at - and that is design and marketing our brand."

What functions will remain at Paul Frank headquarters?

"Paul Frank will become strictly a design and marketing company where we will continue to guide the brand and maintain a consistent, playful message through all areas of new products."

Are there any new categories that will be first up under the new arrangement?

"The first order of business for us is to cover all product categories that we currently make, so that would be apparel, accessories, PJ's and intimates, swim and sportswear. We want to make sure we are covering our current retailer needs and support them before we expand into many diverse licensing opportunities. We have several deals in the works which I'm not at liberty to disclose, but I can assure you we are very excited about them. We anticipate our fans and retailer base will be, too."

What did you like about the Creata team?

"Creata is a family-owned, privately held company with 30 year of experience in licensing. They have offices all over the world and a dedicated team of seasoned professionals that have already walked the steps in which we are about to take. They have a proven track record with major clients and all major movie studios and can be very helpful as we see additional resources to grow this brand into something truly great."

What is it like for the company to go through such a big change?

"It's a mixed bag of emotions. I'm incredibly excited for what this means for a company that started humbly in my 10-foot x 10-foot garage and its potential global reach bringing smiles to millions of families. But at the same time it comes with a human cost in that we have recently had to make some difficult decisions on personnel as we transition to a licensing-based model."

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