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Habitual Changes Hands

Premium denim label Habitual has a new owner.

Premium denim label Habitual has a new owner.

This story first appeared in the May 8, 2008 issue of WWD.  Subscribe Today.

The brand was picked up in March by DenimXworks Inc., an affiliate of New Fashion Products Inc., a Los Angeles-based company that had been Habitual’s primary denim supplier.

Habitual was put on the auction block in February after parent company Pacific Marketing Works Inc. filed for Chapter 11 bankruptcy protection in the Central District of California. In court filings, PMW stated that it intended to sell all of Habitual’s assets and intellectual property to New Fashion Products for $475,000. Bobby Ahn, owner of New Fashion, has assumed the title of president of Habitual.

Despite “trouble in the past,” Ahn said he wants to “reestablish Habitual as one of the top premium denim brands out there.”

New Fashion has been in the apparel business for more than 30 years and has an annual volume of $30 million, the company said. The privately held firm produces more than 40,000 denim units a week for brands such as J. Crew, Armani Exchange, DKNY, Brooks Brothers and Michael Kors.

PMW has been in a legal battle with Habitual’s founders and original designers for more than two years. Michael and Nicole Colovos started Habitual in 2001 and were runners-up for the Council of Fashion Designers of America/Vogue Fashion Awards in 2004.

The relationship between PMW and the Colovoses began to sour soon after the two parties signed an agreement giving each a 50 percent share in Habitual. Michael and Nicole Colovos alleged in legal filings that PMW failed to provide adequate support for fabric, production, marketing and sales and said they were repeatedly pressured to reduce their share of revenues. A settlement entitling the Colovoses to $2.4 million was recently reached, but the bankruptcy filing could prevent them from collecting.

“They are attempting to collect that money and their efforts were stalled and thwarted by the bankruptcy filings,” lawyer Douglas Dal Cielo, who is representing the Colovoses, told WWD in March.

The Colovoses did not return phone calls for comment on the sale.