NAP Inc., a once-thriving $100 million lingerie company, has faded from the scene amid financial problems.
Known as a key player in the better and upscale sleepwear, robe and foundations arena, NAP’s top brands over the past 25 years included Anne Lewin, Derek Rose, the licensed Crabtree & Evelyn, Bill Blass Lifestyle, Docker’s, Disney Couture, Claire Murray and Cuddl Duds, as well as private label and several distributorships in the U.S., such as Princesse Tam Tam, Gossard, Shock Absorber, Karen Millen, Odille Oasis, Argentovivo and Eminence men’s innerwear. At one time, the company held licenses for XOXO lingerie, Vassarette sleepwear and sleepwear by Casper the Friendly Ghost.
Today, NAP’s business, which once took up three floors of the 16-floor NAP Building at 171 Madison Avenue, has been downsized to selling candles, candleholders and related home accessories such as pottery by Bill Blass and Newport Blue. During the official market week in early February, a spokesman who was still with the company when asked why there were no innerwear collections to review, said, “We’re restructuring for this market only.”
Innerwear companies, like most apparel firms, are being hammered by the dismal retail climate and skyrocketing production and shipping costs. Some firms are cutting head count, as well as reducing employee wages by 10 percent.
But NAP stands out as an example of an entrepreneurial American dream that turned into a nightmare over the past several months due to mismanagement by parent company Nitches Inc., according to a number of former NAP employees, licensees and executives in joint ventures for distribution of European brands in the U.S.
Since NAP, whose name is an acronym for its three original partners — Adnan Kandiyoti, Pano Zomopoulos and the late Niko Oreopoulos — was formed in 1984, the company has been sold twice. The first time was in 2002, when it was acquired by Bill Blass Ltd. Three years later, Blass sold NAP to San Diego-based Nitches in an exchange of NAP shares for shares in Nitches.
Nitches, a publicly traded manufacturer and distributor of men’s and women’s apparel, did not file its annual report for the period ended Aug. 31 by its prescribed due date. The company voluntarily delisted itself from Nasdaq in December, allowing it to not file an annual report or quarterly earnings. The most recent stock price history of Nitches saw a 52-week change of minus 97.62 percent, and shares were trading at 0.03 cents on the pink sheets on Friday. The most recent quarterly data filed by Nitches was on May 31, which cited total revenues of $26.3 million.
Phone calls to Steven P. Wyandt, chairman and chief executive officer of Nitches, and his son, Paul M. Wyandt, president and chief financial officer, seeking comment about the company were not returned.
Victor Lee, former president of NAP, said he made repeated phone calls and e-mails to the Wyandts last year regarding the state of NAP’s business and its portfolio of brands, but never received a response. Lee, who said he did not serve as an officer or director of NAP after Nitches acquired the firm, is now president of a new company, Viceroy Collections, which sells and distributes the British lingerie brands Myla of London and Shock Absorber.
“I resigned from NAP in early October 2008 because I did not feel comfortable and did not agree with the manner in which the Nitches board and its officers were dealing with its ongoing financing and payment obligations,” said Lee. “It is a real shame what happened to Nitches and NAP. The board and officers of Nitches have disappointed a lot of vendors, former employees, landlords, customers and, of course, its shareholders. I am still a major shareholder of Nitches stock, which is worth almost nothing right now. I hope they can turn things around.”
Nitches, which claims to have 80 full-time employees, dismissed over 30 NAP employees in November and December, said Peter Keyloun, former national sales manager at NAP.
“They laid off employees, without 24-hour notice and without severance, in two rounds — a week before Thanksgiving and a week before Christmas,” said Keyloun. “There are maybe two people left.”
Unresolved in the seeming unwinding of the company is the future of the NAP Building. Sources said Nitches has a 10 percent stake in the building, which has an estimated market value of between $50 million and $70 million.
The unraveling of the company began a year ago when disputes erupted between officials at NAP and French bra brand Princesse Tam Tam over late deliveries to Dillard’s Department Stores, Victoria’s Secret and Anthropologie.
“There were chargebacks that were passed on to Princesse Tam Tam, and they didn’t like it one bit,” Keyloun said. “Neither did the retailers.”
Brianna Scarborough, NAP’s former brand manager for Princesse Tam Tam and Shock Absorber, said, “They gave no reason for the layoffs, just that they were shutting down the brands. One season prior to shutting everything down with Princesse Tam Tam, we had problems with deliveries, and they said we owed them money. So we paid for spring and summer, but the same thing happened again for fall. But Princesse Tam Tam didn’t deliver and NAP didn’t want to ship until Princesse Tam Tam paid [past chargebacks]. Dillard’s, Victoria’s Secret and Anthropologie wouldn’t allow us to be late, and the shipment date passed, so they canceled orders. But we did very well with sleepwear business by Anne Lewin and Crabtree & Evelyn at Costco.”
Addressing the seven-year relationship between NAP and Princesse Tam Tam, Christophe Piras, export manager for the Paris-based bra brand, said, “There is nobody left at that company, but we are still on contract with both NAP and Nitches. Because of legalities, I cannot elaborate but eventually we will iron this out. From what I understand, Victor Lee’s position wasn’t easy, and they let everybody go. I have the impression that Steve Wyandt is not a very forthcoming man.”
Princesse Tam Tam is owned by Japanese concern Fast Retailing Co. Ltd., owner of the 590-unit Uniqlo brand stores in Japan and the U.K.
There had been hopes for the newest license at NAP with O’Bryan Bros. Inc., a deal inked in December 2007 to produce, design and market a collection of sleepwear, robes and loungewear under the Cuddl Duds label. But the license was dropped this year by the licensee, said Mark Sandler, senior vice president of O’Bryan Bros.
“Some shipments were made in early fall ’08, but nothing substantial,” said Sandler. “The reason we withdrew our license with NAP was inactivity in February. We couldn’t contact anybody because there was nobody to talk to at NAP. We became concerned as milestone dates for fall 2009 product development were not met. As senior management and support staff began leaving the company, it became increasingly clear that NAP would be unable to fulfill the obligations of our license agreement with them. We contacted Nitches when we were ready to take the license back.”
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