Weekly E-News, January 20, 2004

KB Toys Files for Chapter 11
KB Toys Inc. and 69 of its affiliated entities filed for Chapter 11 citing increased price competition for its "financial challenges." The retailer remains confident of its survival with CEO Michael Glazer stating, "We have been assured by many of our vendors, landlords, and other interested parties that they see an important and continuing role for KB Toys in the retail toy market, and will work with us to achieve approval of the company's reorganization plan." To keep operations afloat, the company recently secured a $350 million debtor-in-possession (DIP) financing facility from a lending group led by Fleet Retail Group Inc. To supplement its cash flow during the reorganization, the retailer may convert the DIP facility, upon the satisfaction of certain conditions, to post-Chapter 11 financing. The financing facility, which has a four-year term including the period during which the company is in the Chapter 11 proceedings, remains subject to Bankruptcy Court approval. The company nonetheless will close unprofitable or underperforming stores, cut expenses, and reduce headcount.

Target Takes on Levi Strauss
Target adds another high-profile brand to its shelves this spring with the launch of Levi Strauss Signature. The value-oriented line will feature capris, low-rise bootcut jeans, cargo and carpenter pants, along with five-pocket and relaxed fit jeans, all priced under $25.

New Paint Program for This Old House
This Old House Ventures Inc. is getting into licensing, signing its first deal with ICI Paints for a line of This Old House paints. Terms of the deal were not disclosed nor was distribution and timing of the impending line. More specifics will be announced in the near future. Going forward, categories such as tools, lawn and garden, and building materials will be added to the mix with new licensing agency Brandgenuity, according to Risa Turken, vice president, Time Inc. Brand Licensing.

Warner Bros. Creates Interactive Division
Warner Bros. Entertainment has created Warner Bros. Interactive Entertainment Inc. under the leadership of newly appointed Senior Vice President Jason Hall. The new division will be responsible for creating, managing, and monetizing the studio's long-term interactive gaming goals and business objectives and leveraging its brands across all current and future platforms (including console, MMPOG, PC-based gaming, and wireless applications such as N-Gage). Warner Bros. Games, a subdivision of WBIE, will focus on the creation, development, production, and distribution of games that will be marketed to consumers under the Warner Bros. Games brand.

Marvel Launches In-House Video Arm
Marvel Enterprises stepped up its video business with the creation of an in-house unit to develop products around its portfolio of superheroes. Ames Kirshen was named manager, games development, and will spearhead the new initiative.

Classic Media Taps Playing Mantis
Playing Mantis will bring Santa Claus is Comin' to Town to life in a new line of toys. As master toy licensee of the Classic Media property, the company plans a range of articulated and non-articulated action figures, playsets, and clip-on figures for the U.S. and Canada. First products will be on shelves in fall. Playing Mantis worked with Classic Media on Rudolph the Red-Nosed Reindeer with much success.

The Scoop on Carvel Deal
Carvel tapped Licensing Management International to create a licensing program that builds on the strong brand equity of the ice cream brand. While no formal deals have been announced, Mark Stevens, managing director at LMI, confides that "the company will target food-related areas, branded apparel, and other lifestyle products in the coming months."

Two New Licensees Climb Aboard for Jay Jay
PorchLight Entertainment expanded its licensing program for Jay Jay The Jet Plane, adding Imagiix and Educa Borras, S.A. Under the deal, Imagiix will provide niche-driven developmental toys and chunky wooden puzzles. Educa Borras, S.A., developed a line of wooden jigsaw puzzles for distribution throughout the U.S. by International Playthings. The product will be available in specialty and independent toy stores.

Chica, Inc., Enters Licensing Arena
Chica, Inc., marked its foray into licensing by signing three exclusive deals. Jacques Moret will come to market with junior innerwear and sleepwear, while Hanes/Sara Lee will create a line of children's underwear. Also on board is High Point Knitting with a collection of junior hosiery. All products will be marketed under the Chica label and hit shelves in fall 2004.

A "Charming" New Hello Kitty License
Sanrio hopes to charm Hello Kitty fans via a new deal with High IntenCity Corp. The Charm It! Hello Kitty Collection will be featured within High IntenCity's Charm It! charm jewelry and accessory system due at retail in February. The initial collection will include more than 60 colorful enamel charms with crystals featuring Hello Kitty and her friends doing all their favorite things. The accessories will include jean clips, charm bands, handbags, notebooks, and other novelties. The products will be available at upscale department stores and specialty apparel, toy, and gift retailers throughout the U.S. and Canada.

Licensing 2004 International Is Just Around the Corner
Visit the Licensing International Website at www.licensingshow.com to pre-register for FREE admittance to the Exhibit for all three days of the show and begin to make your plans to attend the most power-packed event in the licensing business June 8-10, 2004, at the Jacob Javits Convention Center in New York City.

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