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PEI: 10 Years in the Public Eye

NEW YORK — It was a typical morning at Nasdaq, except for the 15 female and male models striking a pose — wearing everything from bikinis and swimsuits to summer casual looks.<br><br>The fashion angle was present Tuesday to celebrate Perry...

Models sport looks from Perry Ellis International brands outside Nasdaq Tuesday morning, while George and Oscar Feldenkreis prepare to ring the market bell.

Models sport looks from Perry Ellis International brands outside Nasdaq Tuesday morning, while George and Oscar Feldenkreis prepare to ring the market bell.

Thomas Iannaccone

NEW YORK — It was a typical morning at Nasdaq, except for the 15 female and male models striking a pose — wearing everything from bikinis and swimsuits to summer casual looks.

The fashion angle was present Tuesday to celebrate Perry Ellis International Inc.’s 10th year as a publicly traded company. Perry Ellis chairman and chief executive officer George Feldenkreis and his son, Oscar, the firm’s chief operating officer, presided over the ceremonial ringing of the market bell at 9:30 a.m. along with Nasdaq officials.

Reflecting on the company’s rise to prominence, the elder Feldenkreis said PEI has grown from a private label manufacturer into a diversified company that produces sportswear, swimwear and activewear. Its stable of 25 brands includes Munsingwear, Perry Ellis, John Henry, Manhattan and Jantzen. The company licenses the Perry Ellis women’s wear collection to Public Clothing Co.

“Today, we celebrate our company’s accomplishment of financial growth and recognition as a leader in the fashion industry with distribution in over 10,000 stores,” George Feldenkreis said. “Only in America can an immigrant achieve such dreams. In ’61, I arrived from Cuba with $700. We started the company in ’67 as an importer of Latin Guayabera shirts.

“We went public in ’93 with $34 million in sales. This year, after we complete the acquisition of Salant Corp. [set for next month], we will be a $600 million company. Two years ago, we were trading at $5 per share. We hope today to open the market at $19 per share.”

Shares of PEI closed at $18.90, down 24 cents or 1.3 percent, in Nasdaq trading Tuesday. The 52-week range is $9.29 to $21.49.

Going public was a major turning point for the company because it gave access to public capital and allowed it to grow without eating into its own profits. Feldenkreis said Nasdaq was an obvious choice, because the New York Stock Exchange’s demands were just too costly as a small company.

He noted that PEI tripled its sales during an 18-month period after going public — jumping from $34 million to $50 million the next year and then to $90 million. PEI did a secondary offering in 1995, raising $19 million used to buy Munsingwear, which marked its first brand acquisition.

This story first appeared in the May 21, 2003 issue of WWD.  Subscribe Today.

“It’s very difficult to grow a business as a private company, especially in apparel. One of the ways to grow is to build inventory, but as you build more inventory you need more money,” he said. “You’re constantly borrowing as much or more than the profits you make. It’s an uphill battle — the more you want to grow the more you have to invest.”

The company’s strategy continues to be one that looks for organic growth opportunities, as well as possible acquisitions, said Oscar Feldenkreis. Down the road, he said the company might want to expand its junior business and develop a surf collection.

He speculated that within the next five years, PEI could exceed over $1 billion in sales, including the 25 brands it houses today.

“We have a lot of opportunities within the current structure we have not maximized through the Jantzen acquisition, which has Nike for all genders in swim categories and related accessories,” he said. “We also have the Tommy Hilfiger license in swim for girls and juniors and we’ll be expanding into new categories, such as beach accessories, under these brands. We’ll also be launching Perry Ellis America for men in the latter half of 2004.”

On another note, Tuesday was also the 101st anniversary of Cuba’s Independence from Spain. To that, George Feldenkreis said: “We pray for the day Cuba will be free and Cuba will live in happiness, freedom and prosperity.”