The ax continues to fall at Kellwood Co.
This story first appeared in the May 13, 2008 issue of WWD. Subscribe Today.
Sun Capital Securities Group LLC, which acquired Kellwood for $762 million three months ago, is cutting executive posts — leaving the New York corporate office bare and the St. Louis headquarters grasping to hold onto staff who fear their jobs will be casualties of consolidation, according to sources.
Among those let go were Kellwood global president Jeff Streader, general counsel Thomas H. Pollihan, vice president of corporate communications Donna Weaver, and at least two New York-based strategic executives.
“Kellwood is making strategic and operational improvements to position the company for long-term growth and profitability,” Jason Bernzweig, vice president of Sun Capital, said. “We believe these changes will benefit Kellwood’s customers and employees. Kellwood has a strong portfolio of brands, as well as talented and committed employees, and we are investing in the company’s future.”
This news follows Sun’s hiring of Russell Reynolds Associates Inc. to find a replacement for Kellwood chairman, chief executive officer and president Robert C. Skinner Jr.
Last year, Kellwood’s board approved so-called “golden parachute” severance packages for most of its top executives, so these cuts are coming at a price for Sun.
Sources speculate the private equity firm is going to have a tough time finding a new ceo for the long-underperforming $1.6 billion vendor. Russell Reynolds has already approached several candidates about the job, but the pay Sun is offering does not measure up to the magnitude of the turnaround expected, according to sources.
Although Sun’s specific intentions for Kellwood are unknown, sources said a ceo candidate needs to be financially adept, both to cut costs within Kellwood and to relate to its new private equity parent; have solid relationships with the midtier department stores to which Kellwood sells its predominately moderate portfolio, and come with retail experience, as Kellwood grows its direct-to-consumer arm, opening its first Vince store in Los Angeles this month.
At Kellwood’s St. Louis headquarters, the accounts payable and receivables area is seeing an exodus of employees who fear that their division will be the next consolidated, as Sun restructures Kellwood to cut costs.
Sun has quietly shuttered several businesses in the last few weeks, including O Oscar, Liz Claiborne brand suits and dresses, and its moderate dress business.