Mossimo Giannulli stands to benefit richly from his licensing deal with Target Stores. But a regulatory filing Thursday also shows how much the fashion designer will give up to reap a financial reward.
Giannulli will earn at least $8.5 million in the first year of the deal, which Mossimo Inc. signed this week in a bid to keep the financially troubled company afloat. As part of the deal that surprised long-time Giannulli associates, the 36-year-old Southern Californian signed over rights to his name, signature, voice and personality, in effect becoming the retailer's paid pitchman.
Giannulli, who had hoped to groom Mossimo as a bona fide alternative to such fashionable names as Tommy Hilfiger, Donna Karan and Ralph Lauren, is betting that the new relationship with the huge Minneapolis-based retailer will help turn Mossimo into a household word among among label-conscious Americans.
But the label will be more middle-of-the- road than Rodeo Drive. Mossimo's designs will adorn everything from baby clothes and women's lingerie to suitcases and rugs. Target is betting that it can sell more than $300 million in Mossimo merchandise, according to estimates in a filing with the Securities and Exchange Commission.
The filing provides an intimate look at how a powerful retail chain plans to take an elite brand and turn it into a mass-marketing vehicle. The venture is not unlike Martha Stewart's deal to provide designer goods at low prices for Kmart shoppers, and designer Michael Graves' marketing arrangement with Target.
The filing shows what Giannulli will have to do to earn his keep, but only time will tell whether Target can mainstream what's arguably one of Southern California's fashion pillars. There will be immediate and noticeable changes, according to the filing.
Mossimo, which has been advertising in such high-fashion beacons as Vanity Fair and GQ, and boasts when its daring swimwear appears in Sports Illustrated's annual swimsuit issue, now will be mass-marketed on television and billboards, through direct mail and on shopping bags promoting the Target, Dayton's, Mervyn's and Marshall Field's retail chains.
The Target alliance also signals an apparent downward shift in a pricing strategy that has included $300 eyeglass frames and $500 men's suits. Mossimo now will labor on designs for a Target line.
