California Apparel News

Four months after denying that Mossimo Giannulli—the founder of Mossimo, the line of licensed men’s, women’s, and children’s apparel and accessories and current owner of Modern Amusement, the popular contemporary men’s line—had joined Paul Frank Industries, executives at the Costa Mesa, Calif.–based brand confirmed he indeed has come onboard.

“Mossimo officially completed the stock transaction and became a partner in December of 2007,” said Paul Frank cofounder Ryan Heuser. “We chose not to announce his ownership until the transaction was complete.” The financial terms of his involvement were not disclosed, but sources close to the company said Giannulli has purchased founder Paul Frank Sunich’s 33 percent stake in the company.

Sunich, who created the brand’s iconic Julius the Monkey caricature, left the company in 2005 and had protracted legal tussles with his former partners until finally settling their ownership disputes last August.

Giannulli, who built Mossimo from an indie cult favorite into a multi-million-dollar business before selling it in 2006 to Iconix Brand Group for $119 million in cash and stock, is a veteran of the Orange County lifestyle market. Speculation is high as to how he will change Paul Frank’s company culture.

For now, Paul Frank seems to be keeping Giannulli’s new partnership with Heuser and co-owner John Oswald low key. “Moss doesn’t have a title, but since his recent involvement, we are re-assessing all business components, including the relevance of product categories and profitability,” Heuser said, adding that some categories will be scaled back. “We aren’t dropping men’s and women’s, but we are making them smaller and more focused around what is successful for our retailers,” he said. “Because of Small Paul’s tremendous success, it may seem that some of our other categories aren’t in the spotlight.”

With Giannulli’s expertise in growing a business through licensing and Paul Frank’s recent growing pains, industry observers are waiting to see if the company follows in Mossimo’s footsteps, switching its focus from being a cool, aspirational brand to becoming something more friendly for the mass market through heavy licensing. That would be a big difference from the company’s early approach, which looked to strictly control its look, distribution, image and connection with consumers.

Heuser sidestepped a question about how great a role licensing will be for Paul Frank going forward, instead pointing out that Paul Frank has been licensing products for more than eight years. In an interview with California Apparel News in August, Heuser said the brand is looking to leverage its “two biggest assets”: the company’s name recognition and Julius. “Licensing is nothing new to us. Currently, we have 10 licensees and will continue to add strategic partners where we see strong potential for growth in new areas of brand extensions,” he said. —Erin Barajas