Inside Licensing News and Notes, Oct. 24, 2017
Craftsman Tools to Launch at Lowe’s in Second Half 2018
Stanley Black & Decker, fresh from acquiring the Craftsman brand from Sears Holdings, will launch power and hand tools at Lowe’s in second half 2018, company executives told analysts. The move will be Craftsman’s first distribution outside Sears stores, which accounted for about 90% of sales and the 2,800-store Ace Hardware network that was the remaining 10%. Lowe’s already carries most of Stanley’s branded products, including Dewalt and Black & Decker.
Stanley is targeting Craftsman to generate $300-$400 million in annual sales by 2020. But the brand is expected to post gross margins below the corporate average and have a “modest negative impact” on earnings through 2019 as the company incurs costs tied to relaunching the brand, Stanley Chief Financial Officer Donald Allan said. Stanley will source Craftsman product for 1-2 years before shifting to internal production. Stanley has expanded staff dedicated to developing the Craftsman products to about 100 from three at the time of acquisition (Inside Licensing Jan 5), Stanley’s Jeff Ansell said. “We are pleased with the progress we are making” in designing, developing and commercializing the Craftsman brand, Ansell said.
Craftsman is part of Stanley’s Tools and Storage Division, which posted a 27% increase in revenue to $2.3 billion in Q3 ended Sept. 30. Under terms of the deal, Sears has a perpetual license to source and sell Craftsman tools through its stores royalty-free for 15 years. Sears also will receive 2.5% of sales of Stanley-designed Craftsman products through 2020, 3% through 2023 and 3.5% after that until 2032.
Stanley Black & Decker, Jeff Ansell, EVP and Pres. Tools and Storage Division, 860-225-5111
Funko Prices IPO
Funko priced its IPO at $14-$16, more than doubling the size of the proposed 13.3 million share offering to $245 million. Funko projected the IPO at $100 million when it filed earlier this month (Inside Licensing Oct. 8). Funko will sell 11.6 million shares, while current shareholders sell another 1.7 million, which would raise $200 million. If there is additional demand, another two million shares will be sold increasing the total offering to $245 million.
Funko, Brian Mariotti, CEO, 425-783-3616, firstname.lastname@example.org
Lisa Marks Associates is representing Lionel LLC as the model train supplier exapnds licensing. Lionel, which emerged from bankruptcy in 2008, has had a small number of licensing deals over the years, including most recently with Big John Games for the Nintendo 3DS title, “Lionel City Builder 3D: Rise of the Rails.”… Pan Inc. will work with Epic Rights in Japan to forge licensing deals for the agency’s musical artists. They also will open a Rock & Brews restaurant in Japan in 2018. Rock & Brews, a restaurant venture that includes of Epic Rights CEO Dell Furano, has 18 locations in the U.S. and Mexico.
Epic Rights, Dell Furano, CEO, 310-424-1901, email@example.com
Lionel LLC, Howard Hitchcock, CEO, 704-454-4200
Lisa Marks Associates, Lisa Marks, Pres., 914-933-3900, firstname.lastname@example.org
Hudson’s Bay Selling Flagship Lord & Taylor Store in New York
Hudson’s Bay is selling the 656,000-sq.ft. Lord & Taylor flagship location in New York to real estate startup WeWork for $850 million as it moves to pare down debt. Lord & Taylor will operate the store, which opened in the 5th Avenue location in 1914, through the 2018 holiday season after which WeWork will convert most of the 12-floor building to its new headquarters. The plans leave space for a 150,000-sq.-ft. Lord & Taylor store on the lower floors, which Hudson’s Bay will rent from WeWork. Hudson’s Bay acquired Lord & Taylor, which has about 50 stores, in 2012. WeWork and its partner in the real estate venture, Rhone Capital, will also invest $500 million in Hudson’s Bay.
Hudson’s Bay, Edward Record, Chief Financial Officer, 905-792-4400