Cherokee Global Brands said Target Corp elected not to renew the license of the Cherokee brand in the U.S., according to a regulatory filing. The current license will expire on Jan. 31, 2017.
Target has been licensing the Cherokee brand for almost two decades.
In 2014, Cherokee earned $15.0 million in royalty revenue from Target for the Cherokee brand, excluding Canada sales and school uniforms category sales, according to Cherokee's annual filing. The royalty revenue accounted for 43 percent of Cherokee's total revenue for the period, according to the filing.
“The termination of our license agreement with Target for Cherokee branded products would have a material adverse effect on our business,” Cherokee said in the filing.
The company also reported a 3.2 percent decline in second-quarter sales, hurt by weak demand for Cherokee-branded products in the UK and Canada.
