Hampshire Group Ltd. is beefing up its executive ranks as it looks to move the company to profitability after a long and costly transformation.

Robert Stec, most recently chief executive officer of Passport Brands Inc., has joined the company as president of its Hampshire Brands unit with responsibility for licensed brands and private label business, reporting directly to Heath Golden, ceo of Hampshire. Stec succeeds Eric Prengel, who has resigned.

This story first appeared in the August 13, 2012 issue of WWD.  Subscribe Today.

“The days of just being a strong marketing person who can make sales are over,” Golden told WWD, “and just being an operations and numbers person doesn’t cut it in today’s market either. In Bob, we think we have a great combination. There’s not a lot of margin for error in the market anymore and he’s shown the ability to think strategically and creatively in a wide range of challenging situations.”

At Passport, Stec repositioned the Marithé + François Girbaud brand and added a series of niche labels to Passport’s portfolio. He was earlier associated with Girbaud during nearly a decade with VF Corp., where he was also involved with the Wrangler and JanSport businesses. Just before joining Passport, previously known as I.C. Isaacs, he was ceo of Lexington Home Brands and redirected it into a consumer-oriented marketing company after a history as a manufacturer.

The company also appointed Mitchell Smiles executive vice president of sales for the mass and wholesale club channels and promoted Susan Firavanti to senior vice president of global sourcing, with both reporting to Golden. Smiles, a consultant to Hampshire since 2010, was earlier in his career president of U.S. operations for Otto International with responsibility for its reintroduction to the U.S. market. Firavanti has been director of imports since joining the company in 2010 and was earlier vice president of global sourcing at Bernette Textiles LLC.

The appointments come as Hampshire reported a loss for the second quarter versus a profit in the 2011 period. However, it reduced its operating loss and loss from continuing operations and reported a 40 percent increase in its order backlog versus at the same time a year ago.

In the three months ended June 30, Hampshire reported a net loss of $3.8 million, or 51 cents a diluted share, versus net income of $3.1 million, or 55 cents, in the year-ago quarter. Excluding discontinued operations, the net loss was $4.1 million, or 56 cents a diluted share, against a loss of $7.3 million, or $1.30, in the 2011 period. The operating loss was reduced to $4 million from $7.2 million last year.

Sales more than quintupled to $18.1 million from $3.5 million. Last year’s sales do not include revenue from Rio Garment, the private label manufacturer based in Honduras, which was consolidated into Hampshire’s operations during last year’s third quarter.

In the first half, the net loss grew to $8.7 million, or $1.24 a share, from a loss of $1.9 million, or 34 cents, as sales grew to $40.7 million from $7 million.

Golden said that, while the company isn’t expected to make a profit for the year, he does anticipate profitability for the back half of 2012, as well as in 2013.

“The world is still a very difficult place, but I can say at this point that each of our businesses is growing,” he added.

In addition to Rio, those businesses include the upper-end Scott James, Panama Jack, Dockers and private label. Sales from Panama Jack sportswear are included in Hampshire’s backlog calculations and revenue from additions to the Dockers tops license will begin to be realized during the second half.

The company’s “legacy” licenses for Geoffrey Beene and Joe Joseph Abboud expire at the end of the year and will not be renewed. The company had previously offloaded its women’s sweater and sportswear businesses.

“We’re now in businesses with better margin prospects than the businesses we were in, and that applies to Rio in comparison to our women’s business,” Golden said.

The deemphasis of sweaters within Hampshire has made it less seasonal in nature, and the ceo noted that the company had undergone a similar diversification with respect to its retail distribution. “Historically, we sold department and chain stores,” Golden said, “and now we’re engaged with every slice of the pie — mass merchants, off-price stores, vertical specialty stores, independent specialty stores, midtier and upscale department stores. We’ve taken on product diversification, we’re taking on channel diversification and before long we’ll be able to report some geographic diversification too.”

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