People's Liberation Bags Millions in Charlotte Russe Settlement
In recent regulatory filings, Los Angeles–based People’s Liberation revealed it received a $4.3 million payout as part of its settlement of a contentious lawsuit with Charlotte Russe Inc.
In addition, People’s Liberation disclosed in its first-quarter earnings report, filed #8232;May 16, that it sold its 50 percent interest in J. Lindeberg USA for $1.65 million and is no longer distributing clothes sold in the United States for the high-end Swedish brand. The buyer of the J. Lindeberg operations in the United States was J. Lindeberg USA Corp. in New York.
“After the sale of our 50 percent member interest in J. Lindeberg USA on April 26, 2011 hellip; we no longer sell J. Lindeberg–brand products,” the company said in its regulatory filings.
The People’s Liberation dispute with Charlotte Russe erupted in October 2009, months after the two struck a deal for the People’s Liberation brand of apparel and accessories to be sold exclusively at the mall-based chain, headquartered in San Diego.
The value of the three-year deal was originally pegged at $65 million, according to court documents. The arrangement called for People’s Liberation to design, source and deliver a line of value-based apparel that would appeal to the young female shopper who frequented Charlotte Russe’s more than 520 stores throughout the United States. People’s Liberation made its first delivery of clothing in June 2009.
The legal dispute between the two entities boiled over after Charlotte Russe was acquired in October 2009 by private-investment firm Advent International Corp. in San Francisco and a whole new set of executives took over.
Before a settlement was reached, People’s Liberation sold half of the net proceeds it was hoping to receive from any Charlotte Russe settlement to two parties for $750,000, according to documents filed with the Securities & Exchange Commission.
The Charlotte Russe money helped boost People’s Liberation’s first-quarter net profits to $1.9 million on $4.96 million in revenues compared with a $540,000 loss on $8.36 million in revenues during the same period last year.
People’s Liberation’s other label is William Rast, done in partnership with Hollywood celebrity Justin Timberlake. Liberation’s other label is William Rast, done in partnership with Hollywood celebrity Justin Timberlake.—Deborah Belgum
