NEW YORK — In its quest to build its juniors business, Kellwood Co. saidWednesday that it has acquired the XOXO license for sportswear, dresses and intimate apparel from Global Brand Holdings LLC. Kellwood’s acquisition of the license is subject to the closing of the sale of the XOXO trademark by Aris Industries to Global Holdings, an investment firm based here, which is buying XOXO along with Aris’ Fragile and Lola Brands in a $43 million cash deal.
"We are starting to work on the development of the XOXO line," said Stephen Ruzow, president of women’s wear at Kellwood. He said the company is working to ensure a seamless transition, showing in June market for October deliveries. Aris will ship its goods through Sept. 30, Ruzow added.
Kellwood plans to expand the junior brand, which is focused on better department and specialty stores, into dresses and intimate apparel. XOXO had sales of more than $80 million in 2002 for its sportswear alone, and Ruzow said the company hopes to ship more than that in the first year. Kellwood’s juniors division also includes the teenage denim lines Jolt, Rewind and My Michelle. Industry sources estimate My Michelle exceeds $100 million in volume.
"We are underdeveloped in the junior sportswear category in terms of Kellwood’s women’s wear. Of the $1.6 billion in revenue, we only have $100 million in the junior segment. We have been looking for a vehicle to increase our presence in the junior market," Ruzow said. "We think XOXO has the potential to be bigger than My Michelle because it is a national brand.
"We like the XOXO product, name and channel of distribution it’s in — it was a natural for us go after it," he said.
Kellwood, with overall sales of $2.2 billion, has had a shopping spree in the past year that includes Gerber Childrenswear and the license for Liz Claiborne’s dress and suit division under the Liz Claiborne, Liz Claiborne Woman and Liz Claiborne Petites brands.
Meanwhile, reports that Kellwood was near a deal to buy Kasper heated up Wednesday. "This is something that should come about in the next week," said one banking source close to the deal. Kasper also manufactures Anne Klein.The source also was asked about the future of John Idol, chief of Kasper. "Idol is up in the air," the source said. As reported first in WWD, Idol has been talking to other companies about jobs, including Tommy Hilfiger, which is searching for a ceo, and Michael Kors.
There could be tension between Ruzow and Idol if the two should work together again; Ruzow left his post as president and chief operating officer at Donna Karan in July 1997, just four days after Idol was brought in as chief executive officer.
Todd Slater, of Lazard Frères & Co., said he would be "shocked" if Kellwood wasn’t one of the most interested bidders. "It’s hard to say [when it would close] but it’s doubtful Kellwood is the only one hanging around," he said.
Both Kellwood and Kasper declined to comment.
To manage XOXO, Caren Lettiere has been hired as president of XOXO and works out of its showroom here at 1466 Broadway. Lettiere came from Rampage and was previously a president of the Trilogy sportswear division. She will report to Caren Belair, president of Kellwood’s Western Region’s junior divisions. She started her new position April 28.
"XOXO is on the pulse of trends and serving the better department store customer base. Our focus is to make sure we can solidify XOXO’s place and to grow and build its individual specialty store business," Lettiere said Wednesday in a phone interview.
The dress division will be developed by The Dorby Group, a Kellwood company and leading dress and suit maker for the misses’ and juniors markets. Dorby will establish a team dedicated to developing the XOXO dress line and will name a new division head shortly. The intimates collection will be created by Kellwood’s intimate apparel division and managed by a senior executive.
Ruzow added that the company will also probably "beef up automatic replenishments" on its sportswear bottoms.
"We do feel there are additional categories that XOXO has not maximized," Ruzow said. "We are also working closely with Global in terms of marketing and advertising and have made a big advertising commitment. We want to make sure this brand stays true to its image."Aris chairman and chief executive officer Arnold Simon has said that Gregg Fiene, XOXO’s current chief executive officer, will remain an employee of Aris.
Simon said the company would work with Kellwood through the transition to ensure smooth merchandise flow, and that Aris will use proceeds from the sale to pare down debt.
"We’re very satisfied with the results — we got paid a fair price and believe Kellwood is a very quality company to manage the XOXO brand," he said.
Baby Phat apparel; Members Only sportswear and outerwear, and the La Pepita and Kosiuko women’s contemporary brands are the remaining Aris trademarks that the licensor will continue to distribute among its 1,200 department and specialty store accounts in the U.S.
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