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Market Appears Cool to Kellwood Intimate Unit

Kellwood Co. said last month that as part of a major restructuring plan it would shed the Kellwood Intimate Apparel division.

NEW YORK — Kellwood Co. said last month that as part of a major restructuring plan it would shed the Kellwood Intimate Apparel division. However, several industry executives believe there is little interest in acquiring a private label operation or brands that have not been nurtured into megabrands through marketing and advertising.

Kellwood said it would exit three underperforming divisions, including intimates, which is comprised of the Dotti private label operation; West Coast-based LA Intimates — which produces private label and Dentelle lingerie and loungewear by Sag Harbor and the licensee Izod name — and the Biflex private label unit, which manufactures the licensed Oscar de la Renta foundations. There appears to be a short time frame to sell off the businesses.

Senior retail executives at last week’s market here questioned whether Kellwood intimates would be shuttering, and if so, the reliability of receiving spring orders should Kellwood not find a buyer.

That was a key point posed by retail and manufacturing executives who said they believe Kellwood’s $421.5 million soft goods unit, which consists of Gerber Childrenswear and American Recreation Products, offers a perspective buyer little value because it is anchored in private label.

Adding to the private label challenge is the continuing consolidation among large retailers that is limiting options, as well as channels of distribution for a majority of manufacturers. There also is the general viewpoint that major companies with intimate apparel businesses such as Sara Lee Corp., VF Corp. and The Warnaco Group have a full plate of high-profile brands.

“There aren’t many options for a company like Kellwood [intimates] out there,” said a vice president and divisional merchandise manager at a major store, who spoke on condition of anonymity. “We do our private label direct.”

A former manufacturer-turned-retailer, who also asked not to be identified, said, “Whatever [intimates] brands Kellwood has really represents little value. You have to invest a lot of money to build brands and they didn’t do that. You can’t just put a brand on intimate apparel and build a business. Look at Sara Lee and the Barely There brand and VF’s Curvation brand. They’ve been using their marketing dollars and muscle to get those brands in the [retail] doors.”

A Kellwood spokeswoman declined to comment.

Stan Herman, designer of robes and at-homewear bearing his name at the Carole Hochman Group, said, “Kellwood was becoming leaner and meaner before I left the company nearly a year ago, and I thought they could make it. But their competitive edge was getting shorter and shorter, and at the end their competition was the stores they were selling private label to. Design was not the most important part of their lives, it was the bottom line.”

Josie Natori, chief executive officer of Natori Co., said, “It makes sense Kellwood [wants to unload] its intimates business. It wasn’t their core business. They can’t sell a licensee, so it’s now a question of who wants their private label business. If it’s just a matter of private label, stores can go somewhere else.”