NEW YORK--Amid uncertainty over the future of The Leslie Fay Cos., John J. Pomerantz, chairman and chief executive officer, sent a letter to employees Monday, hoping to ease their anxieties and answer some questions. He told his 725 employees that The Blackstone Group, the company's financial adviser, has been asked to explore the possibilities of selling off Leslie Fay's core businesses. Further, he said, management of the Castleberry division, a knitwear label with an estimated $15 to $20 million in sales last year, "has expressed interest in leading a buyout of the division, and is currently in the process of doing due diligence to see if a bona fide offer can be made." As reported, Sassco's chairman, Arthur Levine, is attempting to lead a buyout of that unit, the firm's largest. Pomerantz's letter, a copy of which was obtained by WWD, began on a personal note: "I am aware of the difficulties and uncertainties that working for Leslie Fay during the bankruptcy process have meant to you and I genuinely appreciate your efforts and continuing loyalty." While Pomerantz was not available for comment Monday, sources said he is trying to put together the financing to purchase a part of the company that would probably include the Leslie Fay brands. Other sources said "other apparel firms" might bid for the Leslie Fay name. The Leslie Fay Dress and Sportswear units combined for estimated sales of about $250 million last year, but are not as profitable as Sassco, which had sales of about $360 million, mostly from its Kasper for ASL label of suits, dresses and sportswear. Pomerantz also said discussions are continuing with the ILGWU over the status of the firm's main manufacturing facility in Wilkes-Barre, Pa. He said a study has been conducted by Deloite & Touche "to see under what conditions, if any, can the company profitably produce dresses there and compete effectively in the moderate dress market." This study, required under the company's agreement with the union following a six-week strike last summer, should be completed by April 17, the letter said. Pomerantz also told employees that the company has retained Jay Alix & Associates, a management consulting firm, to help achieve annual savings of about $15 million. He said two such cost-saving measures under consideration are the expansion of the main distribution center in Laflin, Pa., and the consolidation of the Hanover, Pa., facility into it, and the possible merging of operations on the fourth and 10th floors of 1412 Broadway. "Despite all these distractions, I am pleased to report that business seems to have picked up in recent weeks," Pomerantz said. "Our Leslie Fay dress business at retail has been strong, with more bestsellers and reorders than I can remember... [and] our Leslie Fay sportswear, Outlander and Nipon Studio businesses are expanding their customer base."
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