More information about this deal (see article below which was published in the Wall Street Journal Europe paper, 11 February)
By RACHEL DODES and KELLY NOLAN
Reggae singer Bob Marley's name and likeness have been slapped on unauthorized merchandise since his death in 1981. Now, the Marley family and a private equity firm that invests in retail brands are preparing a major push to license Mr. Marley's likeness, trademarks and themes to apparel, food and even video games.
Hilco Consumer Capital, which has compiled a stable of retail brands including Halston and Ellen Tracy, this month invested some $20 million for half of House of Marley LLC, a joint venture with the Marley family, according to people familiar with the matter
Hilco Consumer Capital is jointly owned by Chief Executive James Salter and his partners in the fund, as well as the Hilco Organization, one of the country's biggest retail liquidation firms, Goldman Sachs Group, and Cerberus Capital Management LP.
House of Marley marks a new twist on an increasingly profitable sideline in retail liquidations. Hilco and rival Gordon Brothers Group are snapping up the rights to defunct retail-store names, such as Sharper Image Corp., Bombay Co. and Linens 'N Things.
They revive the names through licensing deals for name-brand merchandise which is often sold exclusively to a particular retailer as a point of differentiation.
Hilco is separately negotiating to acquire rights to instant-film creator Polaroid's trademarks and to Fortunoff, a well-known New York jewelry and silverware retailer, according to these people.
"There is life after these companies go away," said Mr. Salter of Hilco Consumer Capital. "It's just the retail aspect of these businesses that were broken."
Mr. Salter said the first step for the Marley venture is combating the companies that use the name without permission. The company will spend "as much money as it takes" to stop counterfeiters, he said.
By cracking down on counterfeiters responsible for an estimated $600 million in annual sales worldwide of Marley products, he believes the brand could be a $1 billion retail business in the next few years. House of Marley would earn a royalty of 5% to 10% on sales of licensed products, according to a person familiar with the matter.
The House of Marley will sell the rights to produce products under the brands Bob Marley, Tuff Gong, Catch A Fire and One Love. One of the company's first priorities is creating Marley Lager, a Jamaican beer featuring the singer's likeness. The marketer hopes to add headphones, snowboards, posters, screensavers, among other products, Mr. Salter said.
"We want our legacy and our name to be firm in the world," said Rohan Marley, 36, who designs clothing under the brand Tuff Gong, named for the record label that was started by his father's band, the Wailers.
The Marley family also owns an organic coffee plantation in Jamaica that is developing Bob Marley Coffee, which Mr. Marley said will be on the market later this month.
Mr. Salter got a call from a music industry executive in October, who informed him that the Marley family was looking for a partner to help market the brand for a younger generation.
A month later, he was at the Miami home of Cedella Marley, the singer's daughter, who also designs apparel. As the Marley grandchildren played soccer in the backyard, Mr. Salter and the Marleys hashed out a deal over spicy Jamaican fried fish and corn.
"Dad's legacy continues to grow," said Ms. Marley. Hilco will develop products and events to celebrate what would be Mr. Marley's 65th birthday, which will take place a year from now. The deal between Hilco and the Marleys was signed on the night of Feb. 5, a day before what would have been Bob Marley's 64th birthday.
Mr. Salter said he views the Bob Marley brand as one likely to resonate with the changed mood of American politics.
"The Marleys stand for something, peace and love," said Mr. Salter, who has hired brand guru David Lipman to run the marketing side of the business.
Write to Rachel Dodes at
rachel.dodes@wsj.com and Kelly Nolan at
kelly.nolan@dowjones.com
Printed in The Wall Street Journal, page B1
