Good morning.
A nostalgia for iconic brands is in the air, and it's lucrative.
Take for instance, Barbie. Greta Gerwig, director of Barbie, the live-action movie distributed by Warner Bros., created a modern take on the fantastical world of Mattel’s iconic doll, exceeding $1 billion at the global box office this month. The satirical blockbuster is filled with social commentary that makes you laugh out loud but also leaves you thinking about significant underlying messages—like the need for more gender diversity in corporate boardrooms. There are no women in Gerwig’s fictional version of Mattel’s board, led by a wacky CEO character played by actor Will Ferrell. (Mattel's board in real life does have female directors.)
Now, there’s another toy from decades past that’s getting a reboot with hopes of a big ROI. Think "Care Bear Stare.”
“The Target-trained marketing genius who helped move $16 billion in Harry Potter movies and merch has a nascent new project: Reviving Care Bears,” explains a new Fortune piece by my finance colleague Shawn Tully. He delves into how this move represents a new area known as “direct transaction private investments.”
Back in 1997, when George Jones was the chief of licensing and retail at Warner Bros., he read Harry Potter and the Sorcerer’s Stone for the first time and saw the potential for a brand and major success.
“Jones and his team heavily championed and launched one of the most lucrative movie-plus-marketing twofers in showbiz history,” Tully writes. “The Wizarding World series—starting with Harry Potter and the Sorcerer’s Stone in 2001—now ranks as the fourth highest-grossing cinematic franchise ever, at nearly $10 billion, and Harry Potter–branded offerings, from clothing to cosmetics to sweets, form a mainstay of Warner Bros.’ $6 billion-a-year consumer products business.”
Now through his own firm, Jones is taking out the playbook he used at Warner Bros. to bring back the beloved but modestly sized Care Bears brand.
“On Aug. 24, IVEST—the private equity outfit that Jones cofounded—announced its purchase of Care Bears parent Cloudco Entertainment for $100 million, and now owns the collection of roly-poly, pastel-tinted cuddlies sold in the ‘plush’ sections of Walmart and Target,” Tully writes.
“The Cloudco deal fits into IVEST’s game plan of purchasing and recharging middle-market consumer goods manufacturers, licensors, and retailers,” he writes. “It’s a major player in a new area known as ‘direct transaction private investments,’ or ‘directs.’ Instead of following the Blackstone or KKR model of acquiring enterprises that they gather in a large fund of, say, 12 holdings, ‘direct’ sponsors such as IVEST raise money from family offices that then hold the majority of shares. That template appeals to those super-wealthy clans because they can handpick deals one by one instead of owning part of a big pool containing numerous holdings they had no role in choosing.”
You can read more here about Jones’ plans for the Care Bears along with how strategies he learned from his time at Target creating a “different big box.”
Sheryl Estrada
sheryl.estrada@fortune.com
