By and  on December 8, 2004

BCBG Max Azria Group’s completion of a $53 million bond offering last week gives the Los Angeles-based company some financial muscle to flex, helping it to execute an expansion plan that includes entering the men’s wear business in a bigger way, increasing sales with its retail partners and entering new geographical markets.

The company launched dress shirts for Father’s Day this year. And more is on the way.

“We’ve been flirting with the men’s market, which is interesting,” said Ben Malka, president of BCBG. “There’s this metrosexual [customer type], as well as women doing a lot of the buying in men’s. We’re looking to launch sportswear and suiting for men’s as early as fall 2005, and definitely by spring 2006.”

BCBG has a diversified portfolio of brands, and 105 full-line domestic stores, including outlets. Annual volume in 2003 was $240 million, and BCBG anticipates ending 2004 hitting $375 million.

The goals may seem lofty, particularly with projected 2005 volume at $600 million. After all, the company was the focus of bankruptcy speculation in August 2001 as a way to get out of unprofitable store leases stemming from an overly ambitious expansion plan. BCBG wiggled out of that jam through financing from its longtime lender, GMAC Commercial Finance.

And while the volume has grown in year-over-year gains, there is still some doubt in the marketplace. One executive from a New York-based factoring firm, who spoke on condition of anonymity, said, “One of the big issues you have with BCBG is where do they fit in the marketplace? They say they’re contemporary, but that’s a huge market and there’s so much competition.”

Malka sought to rebut worry over the company’s position, describing such concerns as overblown. BCBG is on track to meet its 2005 goal, with half of sales from its wholesale operations and the balance from its retail stores, he said.

In a telephone interview from Paris on Monday — Malka and BCBG chairman Max Azria are also visiting Madrid and London to explore potential footholds for European expansion — Malka said, “This company is a very different company from what it was in 2001. Back then it had less to do with expansion plans than just the fact that it was bad timing. The [attacks] of 9/11 didn’t help. The brand, however, was never in question by either consumers or retailers, both of whom loved the product and the concept that we were doing.”

To Read the Full Article

Tap into our Global Network

Of Industry Leaders and Designers

load comments
blog comments powered by Disqus