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Sequential Brands CEO on Expansion, Licensing and Celebrities

Sequential Brands has been making industry news with its record of creating impressive growth in brands through global licensing, and the company is about to make its biggest move yet with their pending acquisition of Martha Stewart.

Yehuda Shmidman, CEO at Sequential Brands Group, explained the company’s past successes and future goals at Cowen and Company’s Men-at-Work Summit. He gave a case study of their business model with the Jessica Simpson brand, which Sequential purchased the majority of at the beginning of Q1. Sequential immediately started to grow the brand, launching an activewear category that is now sold at 300 Macy’s doors, as well as the brand’s new e-commerce platform.

Shmidman said, “Once you start thinking about the DNA of brands, which is really how we try to approach every one of our brand assets, then you start to think, okay, how can we put together a large-scale consumer product vision around that? That’s where this business gets pretty exciting.”

This same business philosophy will be applied to Sequential Brand’s latest acquisition, Joe’s Jeans. Shmidman said that although there had been some operational issues at the company, Joe’s is a great brand with new, fresh product, and Sequential plans to grow it two to three times globally.

Sequential Brands will accomplish this by working with Nordstrom, the brand’s primary retailer, and then seeing what role the brand might play in Asia and Latin America. Beyond that, Sequential is experimenting with extensions like footwear and handbags on the women’s side and a leather goods or a watch business on the men’s.

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Another key aspect of Sequential Brands’ business is celebrity partnerships. In addition to the Jessica Simpson and Martha Stewart brands, Sequential owns William Rast, the sportswear brand founded by Justin Timberlake, and Revo, a sunglasses brand with an ongoing partnership with Bono. Shmidman explained that celebrity figures are especially important for the marketing potential they bring.

“We’re not trying to put Justin’s face on the product, it’s not about selling T-shirts with him dancing or anything like that, but it is about style setting,” Shmidman said. “We want to make sure that he’s a part of the William Rast marketing platform, and some of that might be sort of subliminal, so the social media might talk about it or he might be wearing it, but connecting those dots is important.”

The Sequential Brands business model may not work to expand every brand, but Shmidman emphasized that capital resources, as well as a strong management team, infrastructure and retail support from the likes of PVH and Li & Fung will help them continue with their goal of adding two to three brands per year.