Kellwood Co. ended weeks of tense negotiations by completing a $140 million exchange offer with Deutsche Bank and other bondholders.
The agreement exchanges old notes that expired on July 15 for new senior secured notes due in 2014. The deal, closed on Thursday, allowed the firm to avoid a bankruptcy filing.
As reported, jitters about Kellwood’s solvency arose earlier this month when Deutsche Bank unexpectedly elected not to accept a proposed note swap, even though it played a key role in negotiating its terms. The parties have been in talks for two weeks trying to resolve the matter amicably.
“I am very pleased that Deutsche Bank and the other bondholders accepted Kellwood’s exchange offer,” said Michael W. Kramer, Kellwood’s president and chief executive officer. “This will let us continue to build on the operational improvements we have made to date and take advantage of opportunities to grow our brands and our business.”
According to Kramer, there are no notes due until the ones just exchanged mature in 2014. “We’re looking forward to taking advantage of [the work we’ve done so far] and move forward,” the ceo told WWD.
A spokesman for Sun Capital Partners Inc., which acquired Kellwood for $762 million in February 2008, said, “We are very happy that Deutsche Bank got to the position they did,” referring to the about-face in support of the bond exchange.
The Sun spokesman added, “What’s exciting is that the thing we need is time. Mike’s team has improved the business with some initiatives, such as optimizing distribution centers, consolidating operations, and being more competitive on freight. Now with the exchange [offer completed], we have the time to really see the progress and efforts [by Mike’s team] through to the finish. A great deal of progress was made, but there’s more work to be done to create value.”
Kramer said several of Kellwood’s brands have been doing well and business seems to have stabilized at retail, but was careful to temper his remarks. “None of my customers as it relates to my brands are being overly aggressive for back-to-school by any means,” he said.
The ceo said there’s been some pickup on orders in private label, and on some reorders as well. He asserted that Kellwood’s brands, from the premium to the value sector, are performing better at retail than many of their competitors.
“Fashion is still really important [to the consumer],” he emphasized.
As for retailers, Kramer added, “Most everyone is in a great position from an inventory perspective. We’re not seeing huge discounting.”
Kellwood is also entering the premium denim category with its Vince brand in the fall.
“We’re well poised for when the recession does turn around,” the ceo said.
Kramer, previously executive vice president and chief financial officer of Abercrombie & Fitch Co., succeeded Robert C. Skinner Jr. as president and ceo one year ago.
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast