Gordon Brothers, having just completed its purchase of the assets of Wet Seal, will seek licensees to help position the brand as a fast-fashion label that mid-tier and mass retailers could deploy to compete with H&M, Zara, Uniqlo and others, says Gordon Brothers’ Ramez Toubassy.

Gordon Brothers plans to have a brand strategy in place “in a matter of months” to present to licensees with a goal of bringing apparel, accessories and footwear to market in 2018. The Wet Seal brand will initially be positioned with a “small handful” of licensees with the skills to match a fast-fashion retailer.

Gordon Brothers paid $3 million for the Wet Seal assets last week, besting Canadian retailer YM’s $1.1 million bid. Wet Seal, which at its peak had 478 stores and $620 million in annual revenue, last month filed for bankruptcy for a second time.

“It is about quality licensees that can do the things that are necessary for this specific brand like quick turns, maybe lower minimums, flexibility to react to trends in the marketplace and understanding that the teen shopper has a totally different behavior than others,” says Toubassy.

In seeking to revive Wet Seal as a licensed brand for apparel, Gordon Brothers will cull the chain’s database of two million Facebook followers and “millions” of email addresses to help licensees develop products targeting 13-19-year-old female shoppers, says Toubassy. Wet Seal also had 300,000 followers on Instagram and Gordon Brothers will also eventually seek licensing deals for ecommerce and potentially smaller brick and mortar locations and pop up shops, says Toubassy.

“We have a reasonably big brand with an ability to reset its business model when big players in the space are a little lost,” says Toubassy. “I think there is opportunity because there will always be teens and teens that want to buy fashion. We just have to figure out how and where they want to do that, what they want to buy and at what price.”

In seeking to reestablish the Wet Seal brand, Gordon will be open to “interesting and unique structures” for agreements that could involve royalty rebates, increasing royalty rates with volume and waving royalties for “certain channels” of distribution, says Toubassy.

“The teen apparel space has been in trouble and I don’t want to just walk right into the same issues that have caused other people trouble because my licensees won’t thrive and be successful,” says Toubassy. “There is definitely some up front thinking that needs to be done before we jump in with specific licensee partners.”

The purchase of the Wet Seal brand is the first since Gordon Brothers formed the licensing division in buying Toubassy’s Blast-Off Brands last year. In building the licensing business, Gordon will focus first on apparel, accessories and home products, says Toubassy. Gordon Brothers also owns the Polaroid and Coby Electronics brands.

“We are bullish on teen fashion space so that reset button afforded by bankruptcy is going to give us a very big opportunity for Wet Seal,” says Toubassy. “We’re looking at other brands that are complementary but not competitive in terms of demographic.”

The Wet Seal purchase also marks a change in strategy for Gordon Brothers. The company, best known for retail liquidations, previously has acquired brands – The Bombay Co., Linens ‘N Things, Sharper Image and others – only to resell them in relatively short order. Gordon has since adopted a longer term plan, says Toubassy.

“We want to hold onto” acquisitions as long as we are creating value and at some point we want to monetize that investment, but we have a much longer term horizon,” says Toubassy.

Contact:

Ramez Toubassy, Pres. Gordon Brothers Brands Division, 310-243-6766, rtoubassy@gordonbrothers.com