NEW YORK — After a spring characterized by slumping domestic sales, some intimate apparel manufacturers are depending on acquisitions and new product offerings to reverse the trend for fall.
The Warnaco Group Inc. has been among the most active. In the first quarter ended April 3, Warnaco’s intimate apparel sales slipped 3.8 percent to $141.2 million, and management is seeking to revitalize the Lejaby and Olga brands. The drop-off was countered by a strong performance from Calvin Klein underwear.
“Our plans include further expansion in Japan, China, Russia, South America, as well as further penetration in Europe,” Joseph Gromek, Warnaco’s president and chief executive officer, said in May during a conference call with Wall Street analysts after the earnings report.
“We continue to believe that Calvin Klein underwear freestanding retail stores represent an effective way to showcase the full assortment of Calvin Klein underwear in an image consistent with the brand,’’ he said. “We are on track to end the year with over 60 stores in Europe, Asia and North America.”
The company last month opened its second Calvin underwear store in Manhattan.
Management is counting on the introduction of the new JLo line to energize domestic sales. During the May call, Tom Wyatt, who was at the time president of the intimate apparel group, said the company was on track for the JLo line to reach more than 800 department and specialty stores.
“Given the favorable response to the brand by retailers, we are expecting a solid performance by JLo for the back-to- school period,” said Wyatt. “We expect JLo lingerie to contribute $15 million to $20 million in gross revenues in the second half of 2004.”
Wyatt resigned in May for personal reasons, after spending two years commuting to Manhattan, where Warnaco has its headquarters, from Birmingham, Ala. He was succeeded in June by Helen McCluskey, who was president of the Special Markets Group of Liz Claiborne Inc.
Movie Star Inc. is another company that saw sales plunge heading into spring, more dramatically than Warnaco. In its third quarter ended March 31, the New York-based intimates manufacturer saw sales decline 28.1 percent to $12.2 million.Since then, the company has made moves that it hopes will reverse the trend. On July 26, the company announced it had secured a new $17.5 million credit facility with HSBC International, funds the company said would be used for “working capital requirements.” Only days later the company announced it had reached an agreement to acquire New York-based retailer Sidney Bernstein & Son Lingerie Inc.
“We are excited to be acquiring Sidney Bernstein & Son as we have been actively pursuing various business opportunities that will contribute to enhancing future financial results,” said Melvin Knigin, chief executive officer, in a statement. “Last year, their sales were in excess of $18 million.
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