NEW YORK — Due to a solid performance in its sportswear and swimwear segments, The Warnaco Group Inc. on Wednesday reported an improved second quarter by posting net income versus a year-ago loss.
Separately, the company also confirmed an item first reported in WWD that Warnaco is buying Ocean Pacific. The acquisition is expected to close during the third quarter.
For the three months ended July 3, the company posted income of $4.4 million, or 10 cents a diluted share, against a $9 million loss, or 20 cents in the same year-ago quarter. Revenues rose 4 percent to $332.1 million from $319.3 million.
The company said the quarter produced solid revenue gains in both its swimwear and sportswear groups, which helped offset a decline in revenue in its intimate apparel group. Calvin Klein jeans delivered revenue and income gains, and executives during a conference call to Wall Street said the business had “double-digit operating margins.”
Helen McCluskey, the newly hired group president of the intimate apparel group, noted during the call that results for the business were disappointing. In the past, the core Olga and Warner brands have been challenged, and the company said this didn’t change in the latest quarter.
For the six-month period, income was $24.7 million, or 53 cents a share, against a loss of $9.1 million, or 20 cents, in the comparable year-ago period. The year-ago results on an adjusted basis include the firm’s five months as a successor company and a one-month contribution of the predecessor operation while it was still in bankruptcy. Revenues fell 2.4 percent to $725.3 million from $742.8 million.
Warnaco said in a statement that it is acquiring Ocean Pacific, or Op, for $40 million in cash and the assumption of $1 million in debt. The agreement provides for future performance-based payments if certain business targets are met. Those payments, if made, could kick up the total price to $45 million to $50 million, financial sources said.
Dick Baker, president of Op, will join Warnaco and remain as president of the operation while reporting primarily to Roger Williams, president of Warnaco’s swimwear group. While the Op operation will be included in the results for the swimwear group, Baker will also co-report to Joe Gromek, Warnaco’s president and chief executive officer.Gromek said during the conference call, “We are very excited by this transaction. Op is the leader in the surf and beach lifestyle category.”
He disclosed that Op has annual worldwide wholesale revenues of $210 million, and that Op is expected to be accretive in its first year as part of the Warnaco umbrella of brands.
Op’s Baker said in a statement, “We are very excited to be part of the Warnaco team. We believe Op will benefit greatly from the talent, infrastructure and global reach of their organization.”
As one of the most recognizable models in the world, Christy Turlington Burns has an insider’s view of the fashion industry and the allegations of sexual harassment swirling around it. “I can say that harassment and mistreatment have always been widely known and tolerated in the industry. The industry is surrounded by predators who thrive on the constant rejection and loneliness so many of us have experiences at some point in our careers,” Turlington told WWD, along with her suggestions for how the modeling world should protect younger women and men. Read more on WWD.com. Link in bio. (📷: Tony Palmieri) #wwdnews
@asics America has tapped a new brand ambassador: famed DJ/record producer @steveaoki. This initiative is intended to set the tone for the new brand identity and philosophy and will include partnerships with influencers and in-store and off-line activations that will continue into next year. This is Asics’ most significant marketing effort in two decades, and is expected to attract younger consumers to the brand. #wwdfashion
24-year-old Jean Prounis is redefining the rules of jewelry. Formerly a studio assistant to Jemima Kirke and a design apprentice at Ghuran, she focuses on handcrafted subtleties and ancient goldsmithing techniques. “There was a really sterile feel in the environment and I wanted to have jewelry with character that shapes how you wear it everyday,” Prounis said. Each piece is hand made in New York, either by Prounis or three other jewelers in the district. #wwdfashion
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews
“Stranger Things” is getting a new cast member for season 2. Meet @sadiesink_, the 15-year-old who will be joining the Netflix series for its new season. You may recognize her from “The Glass Castle” with Brie Larson and Woody Harrelson, but the Texas native’s next role goes in an entirely different direction. She describes her character, Max, as “a rough and tumble skater girl [who] becomes friends with the boys at school.” The second season debuts on October 27. (📷: @jgreenery) #wwdeye
Amid the Harvey Weinstein controversy, there’s another sector that’s being put under the spotlight for sexual abuse: the modeling industry. While rumors about abuse and sexual harassment of female and male models — and the photographers, agents and others who perpetrated it — have circulated within the fashion world for years, model @cameronrussell started posting stories from models on Instagram last week about abusive situations they’ve encountered — from sexual harassment and molestation to attempted rape. Over 75 have weighed in so far. Read more on WWD.com. Link in bio. #wwdnews
To celebrate its 16th anniversary, @dylanscandybar tapped designers and celebrities to create mosaics out of candy. The mosaics will be auctioned off to support the philanthropic cause of each participant’s choice. Pictured here is the mural created by @aliceandolivia's Stacey Bendet. For a first look at some of the other artwork being unveiled tonight, go to WWD.com. #wwdeye
The annual Veuve Clicquot Polo Classic in Pacific Palisades this weekend drew Kate Hudson, Tracee Ellis Ross, Laura Dern and more. See pictures of the star-studded event on WWD.com. (📷: @chelsealaurenla) #wwdeye
In his new book “Hollywood Royale,” Andy Warhol’s Protégé Matthew Rolston celebrates the Eighties revival of Hollywood glamour. Featuring more than 100 portraits taken by Rolston from 1977 to 1993, the book contains photos of icons like Michael Jackson, Cyndi Lauper, and @drewbarrymore, pictured here in 1991. “Hollywood Royale,” out today, will be accompanied by an exhibition opening at Los Angeles’ Fahey/Klein Gallery on March 1. #wwdeye