Kellwood Co. is stuck between a fed-up Wall Street and an angry major shareholder — and it must either deliver to the first or risk a hostile takeover by the second in 2008.
Since Sun Capital Securities Group LLC issued — then reissued — a $543 million bid for the St. Louis-based vendor this fall, the second-largest Kellwood shareholder has made it clear it intends to buy the $1.6 billion company despite Kellwood's two flat rejections of the $21 a share offer.
"Our strong preference is to acquire Kellwood in a friendly negotiated transaction," stated a letter issued last month by Jason G. Bernzweig, vice president of Sun Capital, to the Kellwood board, "but we are prepared to take all necessary steps to protect the value of our 9.9 percent ownership position in Kellwood, including making a $21 per share offer directly to Kellwood's other shareholders."
Sun Capital originally made its offer on Sept. 18, and a month later, Kellwood rejected that bid.
Kellwood has stepped up its efforts to persuade investors to have faith in its strategic plan. Robert C. Skinner Jr., chairman, president and chief executive officer of Kellwood, made several promises to shareholders, including that the company would boost organic sales growth to 4 to 5 percent, raise operating margins to 9 percent and grow earnings per share at least 25 percent.
But Sun Capital followed that announcement with a reiteration of its earlier offer, insinuating it did not have faith in Kellwood's execution record. Again, Kellwood turned down the bid.
Last quarter, Kellwood posted a loss from continuing operations of $66.3 million, which prompted a restructuring. Its third-quarter earnings will be released Friday. The stock has been trading between $14 and $19 during this period.
Assouline is paying homage to the late Azzedine Alaïa with a reprint of "Alaïa Livre de Collection.” The book is comprised of photographs of the designer's summer 1992 runway show with models Christy Turlington Burns, Naomi Campbell and Tyra Banks, pictured here at right. #wwdfashion #alaia #tyrabanks
Fall 2018 accessories take on a painterly hue, with Nebulas Blue among Pantone’s top 10 colors of the season. (📸: @jonghyupstudio ; editor: @twallz21 ; stylist and set designer: @haideefindlaylevin ) #wwdaccessories
@americanapparelusa is relaunching the brand outside of the U.S. today, opening its online store to more than 200 countries. The company is also contemplating a return to brick-and-mortar, though details have not been confirmed. In tandem with the expanded distribution is a recasting of a social media ad campagn, called “Back to Basics,” pictured here, with a focus on diversity and a cast of models above the age of 21. Read more on WWD.com #wwdnews #wwdfashion
Exclusive: @britneyspears is continuing to expand her brand. The pop icon, who appears in @kenzo ’s latest campaign, is partnering with Epic Rights to launch a line of branded merchandise. Read @hernameislex ‘s story, link in bio. #wwdnews #britneyspears
The Duchess of Cambridge channeled Princess Diana’s look upon giving birth to Prince Harry, when she and the Duke of Cambridge departed the hospital with the new baby Prince this afternoon in London. #wwdeye #princeofcambridge
The new Prince of Cambridge has arrived! The Duke and Duchess of Cambridge posed with the 8-pound newborn. She wore a look from one of her go-to designers, @jennypackham. Tap link in bio for more. #wwdeye #princeofcambridge
Jewelry label @alisonlou has made a name for itself with fine jewelry that speaks to the Millennial market. Now @twallz21 reports that the label is bringing those playful ideas to a new affordable line of lucite hoops with the launch of Loucite by Alison Lou. Here’s a look from the line modeled by @emrata. #wwdaccessories
@sarahjessicaparker and @gilt are teaming up on a bridal ready-to-wear line. Tomorrow, Parker will launch SJP by Sarah Jessica Parker Bridal — and as part of the launch, Gilt will offer 15 exclusive styles from the SJP by Sarah Jessica Parker footwear collection that were designed to complement the new line. Made out of 10 styles, the line is designed for a variety of occasions, from bridal showers to receptions. Get more details on WWD.com #wwdfashion