By  on July 20, 2005

NEW YORK — After 25 years in business, Rafaella Sportswear's growth spurt has really just begun.

Last month, 75 percent of the better sportswear line was purchased by Cerberus Capital Management, a private equity firm based here. Cerberus' plans for Rafaella are substantial, and executives at the sportswear company have no doubt that, in the next few years, Rafaella easily will double its $250 million wholesale volume.

The company last month hired a new chief executive officer, Glenn Palmer, who had been ceo of Amerex Group. Previously, Palmer was ceo of Best Manufacturing, a division of Institutional Apparel Manufacturing. Earlier, he was a division president at Liz Claiborne and began his career at Macy's, where he rose to vice president of merchandising. He succeeds founder Ronald Frankel, who was ceo and is now chairman.

"There's a huge opportunity for growth with this company," said Robert Newman, executive vice president at Rafaella, who started as a salesman for the brand when it opened for business in 1980. "Cerberus is really planning to build on its success with possibilities for licensing, opening new divisions or even building Rafaella into a megabrand. There's so much that can be done."

Cerberus officials declined to be interviewed.

Newman said that, since Rafaella is strictly a sportswear company, there are many new divisions the brand can enter, including dresses, accessories and children's wear. In addition, Newman said the company is planning to launch an ad campaign within the year.

Cerberus' confidence in Rafaella's potential seems valid. The private equity firm has been getting deeper into the fashion industry in recent years — it already owns Mervyn's and Fila, and once considered acquiring the Bill Blass brand. Tending to make investments in distressed companies, past investments were in specialty retailer G&G, Esprit, Guilford Mills and Frederick's of Hollywood.

While Rafaella is now sold in almost every major department store in the U.S., one retailer in particular, The Bon-Ton Stores Inc., based in York, Pa., consistently has done well with the collection.

"What Rafaella achieves for The Bon-Ton is being an item-driven better sportswear resource that consistently delivers the trends," said Mary Kerr, corporate spokeswoman for The Bon-Ton. "In addition, there is a significant amount of value in their product for the price, and our customers recognize that."

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