Less than three months after Sun Capital Securities Group LLC took over Kellwood Co., the private equity firm is cutting the St. Louis-based manufacturer’s mainstream dress business.

This story first appeared in the May 6, 2008 issue of WWD.  Subscribe Today.

Despite the strong dress cycle, Sun Capital deemed Kellwood’s moderate dresses — part of the former Halmode and current Lifestyle division, which includes Sag Harbor dresses — as unprofitable and is shuttering the business, while keeping mainstream sportswear and better dresses, WWD has learned.

The division’s employees were given 60 days notice when they were informed of the closing on Monday, according to sources.

Kellwood’s licenses for O Oscar and Liz Claiborne brand suits and dresses were also terminated last month, and sources expect more elements of the company to be added to the casualty list.

Sun bought the $1.6 billion vendor for $762 million in a cash tender offer earlier this year, after six months of trying to buy the firm. According to sources, Sun executives have been doing due diligence on the company since then to determine where to cut costs in both brands and executives. Sun Capital declined to comment.