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About six weeks after Sun Capital Securities Group LLC took over Kellwood Co., the licensing partnerships for O Oscar and Liz Claiborne brand suits and dresses have come to an end.
Officials from Oscar de la Renta and Liz Claiborne Inc. confirmed the licensing agreements were over, though both declined comment on whose decision it was to end what have been called unprofitable deals. Neither Sun Capital nor Kellwood returned calls.
This story first appeared in the April 3, 2008 issue of WWD. Subscribe Today.
Sources had speculated that, after Sun completed its $762 million cash tender offer for the $1.6 billion vendor, Kellwood could lose some of its key licenses because of change-of-ownership exit clauses.
Kellwood’s performance with licenses has been spotty. The firm stumbled with its initial moderate launch of O Oscar in fall 2004 and then Kellwood pulled the plug in 2005. The brand relaunched for fall 2007 as an exclusive better-priced line with Macy’s, but apparel sales have underperformed.
A spokeswoman for Oscar de la Renta declined to say whether the apparel line will be continued with another licensee. O Oscar is actively signing licensing agreements with Wathne Ltd. for handbags and small leather goods, and with Haskell Jewels Ltd. for jewelry.
Kellwood’s former Halmode Apparel Inc. division launched Claiborne Dresses in fall 2003, and followed with Claiborne Suits in spring 2004.
Kellwood’s underperforming licenses with Phillips-Van Heusen Corp. for the Calvin Klein better and bridge lines could be next when they expire in 2012. According to sources, neither Sun nor PVH is pleased with the line’s performance.
“It’s been one licensed business that we’re not happy with the performance from a sales point of view,” Emanuel Chirico, PVH chairman and chief executive officer, said on an earnings call last week. “We’ve decided, given the environment that we’re in, it’s not a business that we’d like to bring back in-house in the short term, and by that I mean the next two-to-four years. But on a long-term basis, if there’s not an improvement in performance, we will look at the opportunities as we go forward.”
Sources said Sun Capital officials are busy performing due diligence on Kellwood, after not having the opportunity during the six-month period during which the company made hostile advances to take over the company, so decisions regarding keeping executives have yet to be made.