This was reported this afternoon by my friends at the Orange County Business Journal.

Paul Frank Strikes Licensing Deal, Confirms Mossimo Involvement

By Michael Lyster

Orange County Business Journal Staff

Costa Mesa-based Paul Frank Industries Inc. has granted rights to the clothing company’s designs and trademark cartoon characters to Australia’s Creata and confirmed that designer Mossimo Giannulli has become an investor in the company.

Late last year, Paul Frank officials denied speculation that Giannulli, who got his start in Orange County and now is known for his clothes sold by Target Corp., had taken a stake in the company.

Giannulli appears to be behind the licensing deal. Officials from Paul Frank were taking messages from the media but weren’t immediately available for comment.

Terms of the licensing deal weren’t disclosed.

Creata is expected to strike licensing deals for Paul Frank clothes and accessories and look for new ways to license the company’s brand, according to a statement.

Paul Frank’s design and marketing team is expected to continue working on products with help from Creata. Paul Frank also will continue to run its stores and supply clothes and accessories to department stores and boutiques.

Sydney-based Creata is known for its work promoting products from companies such as McDonald’s Corp., Kellogg Co., Nestlé SA and Coca-Cola Co. The company does brand strategy, merchandising, administrative services, packaging design, entertainment marketing and other services.

The deal is the latest twist for Paul Frank, which has about $40 million in yearly sales and is known for its trademark Julius the monkey and other characters.

In 2005, namesake designer Paul Frank Sunich left the company and later sued his former partners, claiming to be fired unfairly and for other reasons.

The lawsuit was settled with Sunich selling his stake in the company. It’s believed Giannulli and other investors bought Sunich’s stake, though Paul Frank for months denied that Giannulli was involved.

Last year, Paul Frank laid off some 20 workers as part of a restructuring after sales growth didn’t meet expectations.

It’s unclear what impact the Creata deal will have on employment. One source familiar with the company said 50 people were laid off on Wednesday with more layoffs to come.

As of late last year, Paul Frank had about 100 employees.

And here’s a story from my some of my other friends at the Orange County Register. This is by staff writer Hang Nguyen. I’ve been out all day so not sure who reported it first.

Paul Frank Industries of Costa Mesa said today that it inked a global licensing deal with Creata and as a result will lay off some employees.

Nancy Carlson, spokeswoman for Paul Frank, couldn’t say exactly how many employees will be laid off.

The 10-year-old company has granted licensing rights of the Paul Frank brand to Creata, which also works with companies like McDonald’s, Kellogg’s, Nestle and Coca- Cola.

Creata will handle sales and distribution of the brand. And Paul Frank Industries will continue to handle marketing and design, Carlson said.

“The company really wants to grow,” Carlson said on why it inked a deal with Creata. “Our resources were too restricted.”

Does the licensing deal have anything to do with new shareholder Mossimo Giannulli?

Carlson referred that question to an executive who couldn’t immediately be reached for comment.

The deal will allow Paul Frank to expand into new product categories. Paul Frank currently makes clothing, wallets, watches, eyewear, home textiles and bicyles. The company owns characters like Julius.