Kinkade May Be Next Lifestyle Brand

 In News

NEW YORK—Move over, Martha. Look out, Tommy and Ralph.
Media Arts Group Inc. says it is gaining momentum with its plans to expand its Thomas Kinkade art-based brand into a big lifestyle brand.
For years, Mr. Kinkade, the self-described “Painter of Light,” has been churning out paintings of idyllic cottages, twinkling lighthouses, shimmering city streets and lush gardens. The images are reproduced and accented with touches of paint by hourly workers, who are known as “highlighters.” When completed, the paintings are sold at the company’s Signature Galleries.
Later, the subjects of these paintings find their way onto items such as coffee mugs, calendars and greeting cards.
In recent years, the Morgan Hill, Calif., company, which has the sole rights to publish and license the Kinkade images, has been reaching further with the Thomas Kinkade brand. The result has been deals with a host of vendors-La-Z-Boy Inc., Monroe, Mich., Bloomcraft, a New York fabric supplier, and even a housing developer—that don’t necessarily plan to use Kinkade images, just the brand name. These licensees want to tap into the spirit of Mr. Kinkade’s paintings and style to cash in on his popularity.
Late last year, Media Arts established a creative-services department to improve the way the company was licensing its brand and move it into new product areas in a more uniform way.
Guiding this effort is Corinne Brohme, who came to the company as its vice president of creative services eight months ago. Ms. Brohme, previously a senior vice president at Martha Stewart Living Omnimedia Inc., set up shop in New York and got to work.
One of the first tasks on her list was to create a palette based on the colors Mr. Kinkade uses in his artwork. The colors will be used in Kinkade-branded products in the future to act like a common vocabulary, linking the wide assortment of Kinkade-branded items to each other. In addition, the colors likely will be used to create a line of consumer paints.
Ms. Brohme also has met, on separate occasions, with the operators of the Thomas Kinkade Signature Galleries and with the company’s current licensing partners to update them on its plans.
Next, the company will look to further develop its existing partnerships and make new deals as it works to establish three tiers of retail products—each tier representing a range of prices—for the home, the bed and bath, the garden, and for babies and kids.
It is an ambitious plan for a company that posted a wider loss in its latest quarter. With four chief executives in the past five years, the company also has had to manage itself despite the revolving door.
Right now, about 90% of its management is new, says Anthony Thomopoulos, its current chief executive. But, he explains, the situation is largely due to the lifestyle-branding strategy.
According to Mr. Thomopoulos, the declining profits and revenue of the latest quarter are tied to the poor economy. But, on the brighter side, he notes, licensing revenue is on the rise, up about 25% during the latest period.
“Clearly there is an appetite for the licensing of the Thomas Kinkade brand,” Mr. Thomopoulos says. He expects the licensing activity will increase only further as the new branding strategy gains traction. As it does, the company may have more reliable performance.
Although Ms. Brohme and Mr. Thomopoulos say the gallery owners support the company’s decision to morph Thomas Kinkade into a lifestyle brand, there are critics.
Several disgruntled gallery owners, who feel the company promised larger returns than it has delivered, have filed suits alleging breech of contract and fraud. Norman Yatooma, a Birmingham, Mich., attorney who represents three gallery owners who have each filed complaints, said his clients take issue with the proliferation of Thomas Kinkade products that they feel were supposed to be sold exclusively through their galleries. Also, the gallery owners contend they were forced to buy the products from Media Arts at inflated prices.
Media Arts said it plans to emphasize the importance of the gallery system by allowing the galleries to exclusively sell all of the Kinkade images for one year before the images will be used more broadly in other licensed merchandise.
At least three of the pending suits may be on their way to arbitration. Seven other cases are also in arbitration. However, according to Mr. Thomopoulos, the vast majority of the owners of Media Arts’ more than 270 Signature Galleries support the company’s strategy because it will increase the interest and awareness of Mr. Kinkade’s artwork.
The artwork is “the core of the brand,” Mr. Thomopoulos says. “They are the crown jewels.”
The artist, who owns more that 30% of Media Arts shares, paints at least 10 paintings a year for the company.
Mr. Thomopoulos declines to provide estimates for the “substantial” growth he says the company can get from its more focused attempt at lifestyle branding.
One of Media Arts’ objectives is to find a retailer that will sell multiple parts of the Thomas Kinkade brand, much in the same way Martha Stewart products are sold by Kmart Corp.
Ms. Brohme expects to launch the paint line by spring 2004. Then, in the fall, the company will roll out its home collection, which will include furniture, rugs, lighting and accent tables. Garden products are expected by spring 2005, but all will depend on the interest of retailers and licensing partners.

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