Kenneth Cole Productions Inc. will sell its 16 percent equity stake in Bernard Chaus Inc. back to Chaus by the end of the year, five months before termination of the company’s license for the Kenneth Cole New York women’s sportswear collection.
The firms agreed to the early termination of the license last month. Kenneth Cole will take the line in-house.
The license, initially set to expire in June 2012, was initiated in June 2005, when KCP purchased 6 million shares of Bernard Chaus stock for $1 a share.
The termination agreement calls for Chaus to buy back KCP’s shares, according to Chaus’s definitive proxy, filed last week with the Securities and Exchange Commission. An earlier SEC filing indicated that KCP also would pay Chaus a termination fee, the amount of which wasn’t specified, and assume “certain of our liabilities associated with our performance under the KCP license agreement.”
Officials at Chaus and KCP declined to comment.
Kenneth Cole merchandise accounted for more than half of the $101.2 million in volume rung up by Chaus in the year ended July 3. The company’s annual report last month noted, “If we are unable to replace the revenue from this license agreement in a timely manner or incur significantly higher costs to do so, the termination could have a material adverse effect on our business.” The document later said that Chaus’ liquidity and financial condition could be affected.
However, the annual report also pointed out that Chaus is “currently in advanced negotiations with a third party to enter into a new licensing agreement” but that there could be no guarantee a deal would be consummated or that such an arrangement would be sufficient to offset the loss of the KCP-related revenue.
Last year, Chaus reduced its net loss to $6 million from $9.6 million in the previous year as sales declined 10.7 percent to $101.2 million.
Chaus shares, which are traded over-the-counter, were most recently at 6 cents, putting the value of KCP’s investment at about $360,000, $5.64 million less than the initial $6 million investment.
A new Joan Rivers coffee table book, titled “Joan Rivers Confidential,” gives readers never-before-seen photos and letters of the late comedian throughout her life. “Because of her drive to always be fresh, she kept records of every appearance, every performance, all the jokes that were used on TV, all the clothes that were worn,” said Rivers’ daughter Melissa. Here, Rivers poses at the “Tonight Show” in Tracy Mills in 1985. Read more about the book and see more photos at WWD.com. #wwdeye
After a career at New York hot spots like Narcissa, Dovetail and Nix, @chefjfraser has expanded to the West Village with The Loyal, a modernized take on an American brasserie. “And as I’ve gone through my career I’ve felt some departure from that kind of simple, straightforward [cooking]. This is meant to take on the idea of ‘what if the American brasserie was invented today?’” #wwdeye (📷: @chinseephoto)
@bellahadid and @lilyaldridge at @bulgariofficial’s celebration on Friday night, toasting the brand's new Peter Marino-designed flagship on Fifth Avenue. The two-part event included a cocktail party at the store followed by a dinner at a mystery location — the Met Cloisters. #wwdeye
From overseeing America’s fastest-growing speciality retailers to codifying cool, WWD talked to the women who are leading the way for the future of beauty. Check out our Instagram Stories to see how these women built today and are creating tomorrow. (📸: @hannah_khymych) #wwdbeauty
For @laperlalingerie's spring 2018 show, the brand chose to host their event at @thevenetianmacao. With Chinese megastars @bingbing_fan and @hubing in attendance, La Perla debuted a rock ‘n’ roll-inspired collection. The show marked the start of Sands Macao Fashion Week, which runs from October 19 to 24 — the city’s first such event. Pictured here are models backstage with glimmering eyes. #wwdfashion (📷: Cheuk-Yin To)
Trending for spring 2018: top stitch design. Gone are the days of stitch just for seams — designers are using the once-minimal detail to create strong decorative elements. (📷: Paola Testa; Styled by @andrew_shang) #wwdfashion
@tradesy is turning the concept of a showroom upside down with its new space in Santa Monica. Here, the company plans to hold events, art exhibits and a showcase rare fashion pieces like this Louis Vuitton boxing set. Get all the details on Tradesy’s first showroom on WWD.com. #wwdnews