MEXICO CITY -- Kellwood Co. -- even with its 15 divisions racking up more than $1 billion in sales and offering a wide range of products to the moderate market -- has found that breaking into Mexico is slow going.

"Retailers are so saturated with local manufacturers. That's all they've had for years and they are loyal to them. It can be difficult," said Yvonne Gutierrez, Kellwood's general manager in Mexico City.

The diversified soft goods maker, based in the St. Louis suburb of Chesterfield, Mo., has been testing the Mexican market for a year, pitching the majority of its apparel lines.

So far, Kellwood's sales in Mexico have totaled just under $5 million. Sears de MÄxico, with 45 stores, is carrying Kellwood's California Ivy, En Chante, Cape Cod-Cricket Lane and Melrose women's apparel lines, the Smart Shirts men's private label program and Kellwood's lingerie line, Ilise Stevens. (Sears, Roebuck is an old associate of Kellwood, which was originally started by a group of Sears' private label suppliers.)

Other Mexican accounts include the Liverpool department stores, with nine units, which carries Melrose and Smart Shirts, and Salinas y Rocha, with eight stores that sell apparel, offering Melrose.

Although Kellwood positions its apparel as being fashion-forward at a moderate price, when Mexican duties and freight costs are added, the wholesale price can be hiked 30-35 percent. All apparel manufactured at U.S. factories with North American textiles eventually will have their duties eliminated under the 15-year phaseout plan of the North American Free Trade Agreement, but for now they are still largely in place.

Until the tariffs change and the Mexican market creates more buying power -- what all business in Mexico is banking on -- Kellwood is looking to sow new territory: the mass market catering to the bulk of the country's 85 million people.

"The reality is there are only so many large retailers," Gutierrez said.

But since Kellwood's current lines don't have prices to match the low-end market, the company plans to come up with one. Suburbia, a chain of 28 department stores owned by Mexican mass market giant Cifra SA, has expressed interest in this idea. Gutierrez's next step is to pick a sample of Suburbia's inventory to send back to Kellwood's designers to see if they can develop an appropriate line of women's sportswear within the chain's price points.

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