ST. LOUIS — Robert C. Skinner Jr., president and chief executive officer of Kellwood Co., told the annual shareholders' meeting Thursday that the company was not satisfied with financial results for 2006, but was making progress toward its goal of succeeding as a brand-focused enterprise.
Discussing the acquisition of high-end brands Vince and Hollywould, Skinner said he expected both to yield positive contributions. Kellwood is evaluating new product classifications for Vince, including a men's wear line that will be launched at wholesale in the fall, and is examining the possibility of opening Vince retail stores, he said.
Skinner recognized two Kellwood brands for exemplary results in 2006. Baby Phat, the label of St. Louis native Kimora Lee Simmons, grew across 29 product categories, and Simmons recently was honored as designer of the year at the American Image Awards. Gerber Childrenswear reached record levels of sales and earnings and was recognized as the vendor of the year in its category by Wal-Mart and Target.
For fiscal year 2006, net sales were $1.96 billion, down 1 percent from 2005. The decrease was attributed primarily to a $39 million decline in women's sportswear. Sales in men's sportswear increased 5.4 percent, to $525 million, and Kellwood's other soft goods segment, which includes Gerber Childrenswear, increased 3.1 percent, to $329 million from 2005. Net earnings rose to $31.4 million in 2006 compared with a $38.4 million loss in 2005. Net earnings from continuing operations increased to $21.1 million in 2006 compared with $18.8 million the prior year.
First-quarter earnings are to be released today.
After the meeting, Skinner told WWD that Kellwood was continuing to look for opportunities to acquire brands that will expand across multiple product categories. Dropping lines — the company discontinued Izod women's sportswear in 2005 — remains a possibility.
"We manage a portfolio of brands, so we are always looking at how we improve the performance of the total portfolio," Skinner said. "That can mean investing in brands, it can mean acquiring new ones, and, at certain times, it can mean exiting businesses. That is a continual reevaluation of our brand portfolio with an eye toward making it stronger."Plans remain to close a Kellwood distribution center in Chico, Calif., in August, but Skinner said no other plant closings were imminent.
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