By  on July 30, 2009

Earnest Sewn has named Gary Cohen president of the U.S. business, assuming some of the responsibilities of Michael Press, who exited the company as chief executive officer last month.

Cohen, who previously headed up the Ted Baker brand in the U.S., joins Earnest Sewn with definite ideas on how to return the brand to growth. His hiring follows a period of management changes and company layoffs due to cost cutting, and a wide-scale restructuring.

Cohen was tapped by Earnest Sewn owners Brian Cytrynbaum and Patrick Assaraf to head the New York-based company, which has never turned a profit in its five-year history. According to sources, Cohen faces a challenge as the company has alienated retailers with late deliveries and suffers from a cash crunch.

Cohen himself acknowledged many of the problems but insisted he is looking toward the future.

“Deliveries have not been good, but we’re going to change that. They’ve been late, and in some cases nonexistent,” said Cohen, who knows Assaraf well, as the latter is the Canadian distributor of Ted Baker. “There’s been poor internal communication and execution. I think the people before me did an amazing job building a brand, but you have to follow through. They had a great thing in the palm of their hand. I’m going to be fortunate enough to take it and build it to another level.”

Apart from Press, people before Cohen included company founders Scott Morrison and Eleanor Ylvisaker, who exited Earnest Sewn in March due to disagreements with Press over strategy and operations. In addition, more than two dozen employees from the company’s New York offices have departed in the past few months via resignations and layoffs.

The company last month shuttered its offices above its Meatpacking District retail store and is now operating out of a Midtown showroom owned by PYA Importers, an apparel distributor owned by Assaraf.

Earnest Sewn is wholesaled in about 350 doors, and the company operates two freestanding stores in New York and one in Malibu, Calif. Total annual sales are between $12 million and $16 million, according to sources.

Cohen is the sole Earnest Sewn corporate employee in New York, and the company’s back-office functions are being handled out of PYA’s Toronto headquarters or Cytrynbaum’s Montreal headquarters, where his company, Majestic Mills, is based. Production is handled out of Los Angeles, where Earnest Sewn has hired a new denim designer, Kearstin Nuckles, an alum of Paige Premium Denim, Blue Jeanius and Swift Denim.

“We’ve wound down the New York office, and we didn’t need a ceo there,” said Cytrynbaum of Press’ departure. “We’ve restructured and moved most of our operations to L.A. or Canada. Gary will primarily handle sales out of New York.”

Cohen’s key growth initiative for Earnest Sewn centers on establishing a sportswear business for the brand. He will introduce a collection of men’s wovens, knitwear, lightweight outerwear and nondenim bottoms at the ENK Vegas trade show in September, with women’s sportswear launching afterward at Coterie in New York.

“There’s always been little bits of sportswear, mostly T-shirts, but now we are really going to push it,” said Cohen. “I think sportswear will equal or exceed our denim volume within three years.”

The sportswear is produced via a joint venture between Majestic Mills and PYA. Cohen already has samples of spring ’10 woven shirts, which will retail for $135 and feature a washed, vintage aesthetic. “These guys are fast. That’s the benefit of working with a company that has great sourcing resources,” he said.

Assaraf’s PYA Importers manufactures and distributes three of its own brands: Nove, Toscano and PYA Black Label. In addition, it distributes brands like Loomstate, Corpus and Ted Baker in Canada. Cytrynbaum’s Majestic Mills is a premium T-shirt maker, with its own spinning, knitting and dyeing facilities. It works with more than 175 brands around the world. Majestic Mills is also the licensee for Nicole Richie’s as-yet-unnamed apparel line.

Assaraf was an original financial backer of Earnest Sewn when it was founded in 2004. Cytrynbaum and his investment group, which includes hedge fund players, became majority owners of the company in January 2008. The founding partners sold the majority stake in order to raise capital to fund the company’s growth, having exhausted their credit lines with banks. (Morrison retains about 25 percent of the company, with Assaraf and Ylvisaker holding smaller minority shares.)

On top of its original multimillion dollar investment to acquire the majority of Earnest Sewn, Cytrynbaum and his investment group have had to pump several million dollars more into Earnest Sewn’s operations this year. Cytrynbaum remains optimistic the investments will pay off. “We are taking the long view,” he said. “We think this brand has a very healthy future.”

However, time may be short to win back retailers’ loyalty. “I received a few styles in January, but then the rest of my spring orders kept being canceled or moved back,” said Jennifer Althouse, denim buyer for American Rag’s World Denim Bar.

Another buyer at one of Earnest Sewn’s top accounts told WWD, “We have canceled our fall Earnest Sewn orders until we have a better understanding of how things will shake out under the new regime.”

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