Byline: Don Yaeger

ST. LOUIS--Kellwood Co. has tagged Asia, and more specifically Japan, as its main international growth area of the next five years.
"Japan is an exciting opportunity--and Asia as a whole could be a big part of our business five years from now," said James C. Jacobsen, executive vice president, administration.
Speaking last week to the St. Louis Society of Financial Analysts, Jacobsen said Kellwood has received "test orders" from Japan retailers, first for fall merchandise and more recently for spring.
"The tests are helping us to learn how we can do business with each other," said Jacobsen, who has made five trips to Japan this year. He described sales this year as reaching "several million dollars."
"Japanese retailers will be expanding into other countries and if you can get established with them, you can grow with them," analysts were told. Current focus is on general merchandise stores with moderate price points, much like U.S. retailers in the Sears category, the official said.
Initial sales to Japan have been especially good in men's and women's outerwear products, such as fleece outfits and squall jackets, Jacobsen said after the meeting. Men's shirts also have been moving well.
Such test merchandise has been successful because it encompasses American styles--and is made in Asia, he said. The company plans to expand its production facilities in that area.
Kellwood presently makes less than 40 percent of the merchandise it sells. While locales may shift, that figure is expected to remain constant because of the new activity in Asia, it was said. Sourcing has switched from such stalwarts as Korea, Hong Kong, Taiwan and Singapore to places like Turkey and Mauritius, the audience was told. "Turkey is booming as source," Jacobsen stated.
Analysts were also told that Kellwood's profits overall are expected to grow at least 12 percent to over $40 million from $35.6 million in the fiscal year ended April 30, 1994. Sales for the current fiscal year ending next April 30 will grow about 14 percent to about $1.35 billion to $1.4 billion from $1.2 billion last year.
While Kellwood will continue to look at men's apparel firms in its quest for two or three acquisitions a year, Jacobsen further noted, women's apparel has a higher priority.
"We are largely a women's apparel company," the analysts were told. "Day in and day out, it's a much better business (than men's). Women are more fashion-conscious and willing to change."
Although Kellwood's men's business is consistently profitable, that is not the case in the industry, Jacobsen pointed out. Hence, the difficulty in finding good acquisition candidates.
Discussing its customers, Jacobsen noted that J.C. Penney Co. was Kellwood's number one customer last year, accounting for 13 percent of sales. Sears, responsible for 80 percent of Kellwood's revenues in 1980, fell to a "near bottom point of 9 percent last year--but is starting to grow again," according to Jacobsen.
Other leading accounts, not in any order, included Wal-Mart, Lands' End, L.L. Bean, Mervyn's, Belk's, Montgomery Ward, Talbots, Federated/AMC, May Department Stores Co. and J. Crew.
--Fairchild News Service

To access this article, click here to subscribe or to log in.

To Read the Full Article

Tap into our Global Network

Of Industry Leaders and Designers

load comments
blog comments powered by Disqus