ARE YOU WONDERING WHATEVER HAPPENED TO VON DUTCH?

Tonny Sorensen said that the Von Dutch brand was overexposed. He’ll reintroduce the brand with a new strategy

Well, it appears the celebrity driven trucker hat and sportswear label is poised to make a comeback. The Von Dutch line was so hot a few years ago that is apparently burned itself out at the seams. In 2001 the business was earning between $3 million and $6 million from sales of T-shirts bearing the designs of Kenny “Von Dutch” Howard. CEO Tonny Sorensen and his partners helped put Von Dutch products in the hands of celebrity stylists, and by 2003 pop stars and celebrities clamored to be photographed in Von Dutch products, especially the trucker caps. Sales hit $35 million in 2003, and $55 million in 2004.

But this year we saw Von Dutch designer Christian Audigier at the MAGIC Show with new labels, Ed Hardy and Christian Audigier. As I mentioned in a previous newsletter, the Ed Hardy booth was so busy buyers were writing their own orders. It seemed that the eternally hip Audigier had transferred his magic from Von Dutch to his new lines. It turns out that Sorensen has something new up his sleeve to boost revenues...and he’s betting that it could bring in $1 billion.

He started out by limiting production of the Fall 2005 collection in the US. He also directed his sales team not to aggressively peddle the collection. Sorensen also funneled most of the Von Dutch products to overseas accounts to grow the business around the world. He demanded a reduction in the size of the giant Von Dutch logo, which had been seen on trucker hats and T-shirts worn by celebrities. He plans to reinforce the popularity of the brand globally by developing partnerships with franchisees who will build Von Dutch boutiques around the world. By the end of November, a Von Dutch shop will open in Moscow, across the street from the Kremlin. A 400-square-foot Von Dutch store debuted in London in October. Another opened in Milan, Italy, in June. He plans to build more than 50 overseas shops, with locations in the Middle East and China, by 2006.

Domestically the company plans to build more than 10 boutiques next year. It currently has a boutique on Melrose Avenue in Los Angeles and one at the Third Street Promenade in Santa Monica, Calif. One retailer said: “Everyone wants what they can’t get. Once a brand becomes mainstream, people lose interest.”

So that the Von Dutch name does not bore the eternally hip they have partnered with new licensees to make Von Dutch stationery, cellphone covers and energy drinks made by Las Vegas–based Rockstar Inc. “It’s a lifestyle brand. The trucker hat was hot a couple of years ago. It could be the energy drink next year.”

“Licensing a diverse array of products can do wonders for the brand or backfire,” said Charles Riotto, president of the International Licensing Industry Merchandisers’ Association. “There is an art to doing this,” Riotto said. “It can be a great vehicle for building brand awareness, but you still have to have a viable product to start with, and good management.” According to Riotto, one company that built a successful track record in licensing is DaimlerChrysler’s Jeep brand. Best known for making Jeeps, the brand has also licensed a range of products, including baby strollers, camping gear, track jackets, bicycles and coffee mugs. Its licensed products were taken seriously because they had a rugged feel that consumers associated with the core product. “If consumers don’t accept the cachet of a product, they won’t buy its related products,” he said.