The Bill Blass ready-to-wear line designed by Peter Som could be in danger of closing.
The existing Bill Blass operation is worth more without the unprofitable high-end designer business, known as Bill Blass Couture, because of losses that would have to be assumed by a new owner if the rtw unit were retained. Sources peg the losses sustained by that business at more than $1 million a year.
A sale of the Bill Blass brand without Couture by its owner, NexCen Brands Inc., essentially would be of the brand name and its licensing operation. That would allow a new owner to reap the benefits of future licensing opportunities, without incurring the debt and overhead sustained by the operation of an actual design house and its required design and manufacturing network.
If a sale of the Blass brand gets completed without Couture, the rtw unit likely will be shut down by NexCen, industry sources said. Moreover, said one industry insider, the Blass brand without the rtw collection would allow for the brand to be taken down-market, where it would have a shot at a new customer base in either the mass or discount distribution channel.
Reacting to the reports, Craig Hoffman, president of NexCen’s Bill Blass unit, told WWD, “Bill Blass Couture is an essential component of the Bill Blass brand and NexCen is supporting Couture so that it operates at the highest level of quality. Couture is opening market this week with its spring collection and we are looking forward to the continuation of the exciting design direction Peter Som began last fall. NexCen’s sale process is still under way and until a sale is completed, it will operate the business for the greatest value of the brand.”
Asked if NexCen would continue to operate the business if a buyer balked at the rtw unit, Hoffman said, “I don’t think we know the answer to that. We’d have to evaluate that with a new buyer when that materializes.”
Following reports that Som, the designer who has his own collection and serves as women’s wear creative director for Bill Blass, would leave Blass, NexCen said in late July that he hadn’t resigned and would present a spring 2009 Blass collection for retailers only, in lieu of a runway show. Som presented his own collection on Monday. Neither the designer nor NexCen has clarified whether or not he will continue in his current capacity for Blass.
Word of the possible separation between Blass and Couture wasn’t entirely a surprise. NexCen made what many considered a curious decision in July, tightening its grip on the Blass business it already was trying to sell with the acquisition of the Couture unit, which is responsible for the rtw collections presented under the late designer’s name.
Supposedly the purchase was to make it much easier to effect a sale of the entire Blass brand since all operations now would be under the same umbrella. “As we continue to explore strategic alternatives, including the sale of our Bill Blass brand, we believe that owning Bill Blass Couture will maximize the potential sale value of the overall business,” Robert D’Loren, then chief executive officer of NexCen, said in July.
However, the rtw business has had a very distinct downside. In a filing with the Securities and Exchange Commission, NexCen said the unit operated at a loss and the brand management firm expected it would have to pump between $1.7 million and $1.9 million to keep it in operation.
NexCen acquired the business from Michael Groveman and Carly Andrews Inc. for $425,000 in net liabilities. It agreed to forgive the acquired firm’s obligation to repay about $950,000 lent during the first quarter of this year to support marketing expenses, and released Groveman from a three-year non-compete provision dating to NexCen’s acquisition of the Blass brand in February 2007.
Groveman, who, along with Tharanco Group chairman Haresh Tharani, sold the Blass business to NexCen for $54.6 million in cash and stock in February 2007, bought the Couture business for undisclosed terms just before NexCen’s Blass acquisition. It then operated through a royalty-free license from NexCen.
Sources also said activity on a possible sale of Blass could heat up by midmonth. It was anticipated last month that activity would heat up on the sale after NexCen’s financial adviser began sending out one-page information sheets about existing Blass licenses earlier in the month.
The adviser requested that initial bids for the Blass brand be submitted by mid-September.
Previously, Arnold Simon’s Designer Licensing Holdings, which has the Blass jeanswear license and owns 10 percent of the Blass trademark, had made a preliminary offer of $24 million for the brand. Angelo, Gordon & Co., the private equity group that has owned the Bill Blass New York direct sales operation since 2006, has offered $26 million for the brand, bankers said.
It couldn’t be immediately determined if both are planning on resubmitting bids for Blass this week, or if there are other so-called dark horses that could make a play for the Blass brand.
An announcement on Blass this month could involve the naming of a stalking horse bidder. That step will allow NexCen to have a second bite at the proverbial apple because it paves the way for others to step up and submit higher offers once a baseline price has been set.
Sources expect the initial stalking horse bid to come in at between $26 million and $27 million, or slightly less than half of its purchase price.
Meanwhile, even with a new bank agreement in place, NexCen is under additional pressure as the sale of its Waverly home brand is on hold.
Sources said negotiations between NexCen and the partnership of Windsong Brands and Hilco Consumer Capital, expected to produce a sale of Waverly for $30 million to $32 million, have broken down. Windsong and Hilco have had an exclusivity agreement for Waverly since July. While it couldn’t be learned why the discussions fell apart, financial sources said the liquidity crunch may have made it more difficult for the partners to obtain financing for a Waverly purchase.
NexCen bought Waverly for $36.8 million in May 2007.�
My character, Dinah Madani, is just the coolest, [most] badass woman imaginable," says @amberroserevah. The actress stars in @marvel's newest series on @netflix, @thepunisher. To prepare for her role, Revah sat down with Homeland agents to get a real sense of with Dinah's day-to-day life is really like. Read our full interview on WWD.com. #wwdeye (📷: @jilliansollazzo)
A scene from the 91st annual @macys Thanksgiving Day Parade. The parade, which boasts 50 million TV viewers and 3.5 million on-site spectators, is considered one of the largest and most watched parades in the world. (📷: Jason Szenes/EPA-REX)
The circus came to @bloomingdales 59th Street on Tuesday night and lit up Lexington Avenue with acrobatic dancers, death-defying knife throwing, sword swallowing and aerial acts with no net. The 45 minutes of theatrics built up to unveiling the holiday windows depicting @swarovski crystal-encrusted circus pieces and scenes from “The Greatest Showman” – songs from the soundtrack included. See the rest of the photos on WWD.com #wwdfashion (📷: Joshua Scott)
The psychedelic fashion that pervaded the ’60s is back with an exhibit at the @museumofcityny. “Mode New York: Fashion Takes a Trip” chronicles the changing styles from 1960 through 1973 and features designers such as @ysl, @oscardelarenta and more. The exhibition, which is on display through April 1, is organized into four periods: First Lady Fasion, Youthquake, New Bohemia and New Nonchalance. Pictured here is model Pat Bardonella during the Garvey Day Parade in 1968. (📷: @kwamebphoto) #wwdeye #wwdfashion
“People should be a lot more honest in expressing both the dark and light of themselves. We need to give each other the space to do that because it’s the only way we can grow and evolve,” says @noelwells of her new film “Mr. Roosevelt,” which is largely based on her own struggles. Unexpectedly leaving @nbcsnl in 2014 after just one season, Wells felt set back in her self-esteem and career trajectory. She quickly refocused her energy to more personal projects, which led to the completion of “Mr. Roosevelt.” Read the rest of WWD’s interview with the “Master of None” actress on WWD.com #wwdeye (📷: @jilliansollazzo)
@barbrastreisand is giving fans a chance to see her perform up close in a new concert series, which makes its debut on @Netflix today. From behind-the-scenes takes to her concert performance in Miami last December, the two-hour streaming special captures Streisand in her element. Pictured here is the singer/actress photographed for WWD in 1963. (📷: Palmieri Tony) #wwdeye #wwdarchive
@chanel and @pharrell dropped what’s being dubbed as the world’s most exclusive sneakers yesterday. The Adidas Originals NMD Hu, which Williams designed in collaboration with Chanel and @adidasoriginals, has a waiting list of over 120K people who pre-registered online at chanelatcolette.fr –– and only 500 pairs are on sale. The singer predicted the resale value of the shoes could reach $40K. Read the full interview on WWD.com. Link in bio. #wwdfashion (📷: Dominique Maître)
@imanshumpert is diving deeper into his creative endeavors and relaunching his clothing line, Post 90s, and is helping to raise money for the hurricane victims in St. Maarten with a jersey he’s designed with his brother. The Cleveland Cavaliers player talked to WWD about kneeling during the national anthem, working with fashion brands and how he wants to be more than an @nba player. Read the interview on WWD.com #wwdfashion (📷: George Chinese)