Warnaco Group Inc., the $1.8 billion apparel firm, is exiting parts of its swimwear and Lejaby divisions to focus its efforts on its Calvin Klein business.
After tough earnings in its swimwear group last year, Warnaco is repositioning the $390 million division by:
Outsourcing its Mexican manufacturing operations to a company controlled by a local business partner.
Selling Catalina, Anne Cole and Cole of California, with the help of Financo Inc.
Exiting by June 30 all of its private label and Michael Kors and Nautica swimwear businesses.
“We are clearly focusing on our Calvin Klein businesses, which make up almost $1.2 billion of our revenues,” said Joseph Gromek, Warnaco’s president and chief executive officer. “The resources of Warnaco should be focused on the businesses with the largest growth potential.”
With the help of Goldman Sachs, Warnaco is also exploring strategic alternatives for its Lejaby businesses, which include the Lejaby, Rasurel and Elixir intimate apparel and swimwear brands.
Following the repositioning, Warnaco Swimwear Group will consist of only Calvin Klein and Speedo, brands which Warnaco believe have the most growth potential. These two brands contributed about $260 million in volume last year, and the company hopes to see double-digit growth from them.
“Speedo is the dominant player in the swimwear business, and with the new management in place under Helen McCluskey [who was promoted in June], we think it has great growth potential,” Gromek said. “Calvin Klein is the single most important brand to Warnaco right now, and we think the swim license fits well with our Calvin Klein underwear and jeans. We think it can reach $50 million in the next few years.”
Warnaco expects to incur between $30 million and $32 million in restructuring charges, primarily from transferring ownership of its swimwear manufacturing operations.
According to Warnaco’s 2006 annual report, the swimwear group revenues increased while operating income fell. “As the largest provider of swimwear in the United States, we are not satisfied with these results and have identified opportunities to deliver measurable improvement in the years ahead,” the report said.
The annual report singled out Speedo, noting “we will take advantage of the momentum in Speedo as we begin to gear up for the 2008 Beijing Olympics.”According to industry sources, Michael Kors Inc., which has had its swim collections licensed to Warnaco since 2005, is in final stages to enter a licensing agreement with Swimwear Anywhere for both the Michael Kors and Michael Michael Kors brands. The launch season with Swimwear Anywhere is likely to be cruise 2009. A Swimwear Anywhere spokesman declined comment.
VF Sportswear Inc., a subsidiary of VF Corp., has signed a letter of intent with Mainstream Swimsuits Inc., for the licensed manufacturing and distribution of Nautica brand women’s swimsuits and cover-ups.
@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)
Not only does #TheProfit return to CNBC tonight, but @marcuslemonis has launched @shopmarcus, a new shopping and lifestyle retail experience in Aspen and Chicago, with more locations to come. The retail stores offer in-store stylists and a variety of contemporary womenswear selections.
“It’s life, I’m going to face it,” @mingxi11 sighed. “I fell, but you know, I think the most important thing is that I get back up. I had the love, the help from my sister — the girl next to me Gizele [Oliveira] — she’s so nice. When I went backstage everybody was trying to comfort me like ‘Oh Ming, it’s OK.’ I’m really, really touched. I think it’s them who gave me the courage to go back on stage for the finale,” Xi told WWD of her fall at the @victoriassecret fashion show. (📷: David Fisher) #wwdfashion #vsfashionshow #victoriassecret
@louisvuitton tapped @therealpeterlindbergh for its latest city-centric photo book, which is part of a series called Fashion Eye. The primarily black and white book captures the spirit of Berlin in 57 images shot between 1989 and 2019. “Berlin is an inspiration for me, more than a city. I mean @millajovovich is simply Berlin!” said Lindbergh. #wwdfashion
“You know, I think audiences expect a certain performance so I have to deliver to them what they’re expecting to a certain degree. But I’m also a different actor and a different person, I have my own spin on the character,” says @noahegalvin of his takeover of the leading role in “Dear Evan Hansen” following the departure of @bensplatt, who originated the role. Read WWD’s interview with the 23-year-old actor on WWD.com #wwdeye (📷: @jilliansollazzo)
For pre-fall 2018, @etro created richly-colored wonderland, using tapestries, textiles and wallpapers from the Eastern world at large. The line featured floral and graphic prints and jacquard motifs, like this two-piece look featured here. #wwdfashion (📷: Giovanna Pavesi)
@kith is moving into children’s. The men’s and women’s streetwear brand has launched Kidset, a Kith kids line located in New York at 64 Bleecker Street. The line includes mini versions of staple Kith pieces like the Astor bomber jacket and the Kith box logo sweatshirts, along with a wall that can display up to 120 pairs of shoes from @adidas, @newbalance, @timberland and more. #wwdfashion
“I just wanted to create this fully rounded character, but I do think what excited me most was just the opportunity to give a group of people representation that I feel needs it. I like to do characters in projects that stand for something and Karolina definitely does, so that was really exciting to me,” @ginnygardner says of her new role in @hulu’s “The Runaways.” Gardner plays Karolina Dean, a queer superhero, which is a rarity for @marvel. Read more about Gardner’s character on WWD.com #wwdeye (📷: @dandoperalski)