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Denim Dish: Levi’s Knits Sweater Deal … Ubi Part Two … Sportswear Spurs Warnaco …

Sportswear Spurs Warnaco…Touchbase Focuses on Tradition…True Religion Finds More Profits…Ubi Jeans Part Two.

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Levi’s Knits Sweater Deal

Levi Strauss & Co. and Hampshire Designers Inc. are expanding their relationship with a license for Levi’s branded women’s sweaters for fall 2005.

Hampshire already produces men’s sweaters under the Dockers and Levi’s brands for the jeans maker.

Design of the new 24-piece cotton and cotton-blend line will be headed by Alexandre Stepaniuk, who also goes by the name Nick Danger and is creative director and vice president of the Levi’s and Nick Danger brands.

The Levi’s line will be shown to stores during the January market and will wholesale for $12.50 to $17.50.

In addition to being styled for “that homespun all-American girl,” Stepaniuk said some of the sweaters also have a sexy, rock ’n’ roll element.

“It has to be authentic, but femmed up,” said Stepaniuk, aka Danger, whose nickname dates from his time in the military.

The line has some argyle and sporty looks, but also leans toward the harder side with a piece that hints at a motorcycle jacket with similar hardware, such as snaps. Not all the looks are straightforward. For instance, there is an argyle sweater that is inside out with exposed seams.

Each of the sweaters coordinates with jeans and features Levi’s signature red tab.

“There’s so much add-on business beyond jeans,” said Michael Culang, president of Hampshire Brands.

Culang projected the initial launch to reach 1,500 to 2,000 stores. Levi’s men’s sweaters are in about 2,000 retail locations.

Market sources indicate wholesale sales of sweaters under the Levi’s and Dockers names would approach $100 million next year. — Evan Clark

Ubi Part Two

Ulrich Conrad Simpson had everything going for him when he launched Ubi Jeans, a men’s premium denim collection, in 1999. Everything, that is, except a financial backer, which led to him closing up shop last year.

Now on sounder financial footing and operating in Latin America, he’s ready to pick up where he left off.

“Guatemala is my sanctuary,” Simpson said on a recent visit to New York. “Inspiration-wise, it is one of the biggest influences on the line.”

Simpson, known as Ubi to friends, is also creative director of Koramsa, a major pants manufacturer based in Guatemala City that manufactures his new line. He’s also found some new investors, but declined to disclose their identity.

Simpson’s current denim collection, also called Ubi Jeans, is now 90 percent devoted to women.

“I’ve spent a lot of time studying women,” he said. “I know there’s not one fit for every girl. You have to do a range of fits.”

With his design studio in Guatemala, it’s easy for Simpson to infuse the collection with authentic Guatemalan flavor.

“The buttons on our blazers are made by hand and are cut from stone and jade,” said Simpson, running his fingers over the bumpy surface of one of his buttons. Each button costs about $1 to make.

“Guatemala has such a graphic influence that plays into the process,” he said. For instance, the line features denim skirts embellished with the distinctive geometric stitching used in Guatemala’s native textiles.

His collection includes basic five-pocket styles, as well as denim skirts and blazers and twill trousers.

Simpson’s career took off in 1993 when Tommy Hilfiger recruited him for his design team during his senior year at the Fashion Institute of Technology. He eventually worked his way up to design director of that firm. In 1999, he created Ubiquitous Industries Inc. Consulting, where he worked with companies such as Coach and Nike.

Ubi Jeans will hit shelves in specialty boutiques in February, with wholesale prices ranging from $70 to $150. Simpson predicts the wholesale volume of Ubi Jeans to range between $1.5 million to $2 million for 2005.

“We’re doing it all with the right tools, at the right time and positioning ourselves correctly in the market,” he said. — Lauren DeCarlo

Sportswear Spurs Warnaco

Citing a strong surge in its sportswear business — including the Calvin Klein Jeans brand — Warnaco Group Inc. swung to a profit in the third quarter on 10.5 percent sales growth.

The firm posted net income of $1.6 million, or 3 cents a diluted share, for the three months ended Oct. 2, compared with a net loss of $7.2 million, or 16 cents a share, a year earlier. Sales were up 10.5 percent to $324.4 million in the period. The third-quarter profit came in a penny below analysts’ consensus, according to Thomson First Call.

Joe Gromek, the New York firm’s president and chief executive officer, said a change in the firm’s approach to designing the Calvin Klein Jeans brand helped drive that line’s 30 percent sales growth.

“Calvin Klein Jeans’ strong performance during the quarter reflected our ability to improve brand performance by developing and delivering products that match consumers’ needs,” he said during a conference call with Wall Street analysts, according to a transcript of the call. “Since assuming greater control over the initial design and development process, we have realized improvements in delivering trend-right products in a timely fashion.”

Since Warnaco’s emergence from bankruptcy and Calvin Klein Inc.’s acquisition by Phillips-Van Heusen last year, the firms have changed their approach to developing Calvin Klein licensed products, allowing Warnaco to handle more design functions in-house than had been the case previously.

Warnaco’s sportswear segment, which includes the Calvin Klein business, posted sales of $135 million, up 20.5 percent from the prior year. Sales at the intimate apparel division, Warnaco’s largest business, were $158 million, up 6.5 percent. Swimwear sales were down 6.1 percent to $31 million in a quarter that typically represents about 10 percent of the division’s full-year sales.

Helen McCluskey, group president of Warnaco’s intimate apparel businesses, noted on the call that intimate apparel sales were lower than they would have otherwise been during the quarter because the firm had trouble filling reorders due to some problems as it moves from company-owned manufacturing to an outsourced model.

Frank Tworecke, president of sportswear, said his division’s margins had improved, partly as a result of lower sales to off-price retailers.

For the first nine months of the year, Warnaco reported a $26.3 million net profit, which worked out to 57 cents a diluted share. That compared with a $16.3 million loss, or 36 cents a share, a year earlier. Sales were $1 billion, up 1.3 percent from a year earlier. — Scott Malone

True Religion Finds More

True Religion Inc., which launched for spring 2003, reported explosive earnings and sales growth in its third quarter. The Los Angeles-based firm attributed its rise to increased distribution to better department store chains.

The firm posted net income of $954,102 on sales of $7.4 million for the three months ended Sept. 30. That compared with profits of $3,750 on sales of $710,143 a year ago, a time period that reflected the firm’s first full quarter of operations in its current incarnation.

Jeffrey Lubell, the brand’s founder and firm’s president, merged his former privately held apparel firm into the shell of a publicly traded company that had been founded as an energy-exploration enterprise, to create True Religion’s current status as a publicly held company.

For the first nine months of the year, True Religion posted net income of $1.7 million on sales of $14.1 million.

True Religion shares trade over the counter. On Wednesday, they closed at $4.04, up 4 cents. — S.M.

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