Authentic Brands Group is negotiating with another potential operator for its Hickey Freeman brand.
This story first appeared in the May 2, 2013 issue of WWD. Subscribe Today.
According to market sources, the licensing company, which purchased the high-end men’s wear label as part of its acquisition of HMX Group for $72.3 million at the end of last year, is in discussions with Samuelsohn to one day operate its factory in Rochester, N.Y.
Samuelsohn, a Montreal-based tailored clothing manufacturer founded in 1923, was purchased in early 2010 by Grano Retail Investments. The company produces private label suits for Paul Stuart and Harry Rosen and sells its own Samuelsohn-label goods to 250 upscale specialty stores in the U.S. and Canada. The brand is currently at overcapacity at its Canadian manufacturing facilities and is looking for a spot to expand production. The Rochester plant has available production capacity and its workers are covered by the same union.
James “Jamie” Salter, chairman, chief executive officer and president of Authentic Brands, told WWD Wednesday: “We are potentially looking to merge Rochester with another factory for more production. It’s very far from a done deal but if it happens, it will secure the jobs even further there. I need that plant to go 24/7.”
He stressed that Authentic has no plans to sell the Hickey Freeman brand to Samuelsohn or anyone else. “Hickey will remain with ABG as the owner of the trademark,” Salter said.
Under the terms of the deal to purchase the assets of HMX, Doug Williams, former ceo of the now defunct company, formed a new business, W Diamond Group Corp., and obtained a 40-year license to handle the day-to-day operations of the brands, which include Hart Schaffner Marx, Bobby Jones, Christopher Blue, Exclusively Misook and Jag Jeans in addition to Hickey. W Diamond pays royalties to Authentic Brands.
Asked if the ultimate plan is to move the Hickey license to Samuelsohn, Salter said: “We won’t confirm or deny anything. We’re exploring all options. We just want to make sure the Rochester plant is filled to capacity to secure jobs, which is the mandate that ABG and W Diamond have had from Day One.”
Since the purchase was finalized in December 2012, Authentic Brands has been working to stabilize the brands. Its business model is one of a licensor. So far, it has moved the dress shirts and neckwear license from W Diamond to PVH Corp. and sources said an announcement is expected this week on the disposition of Christopher Blue and Jag and a new licensee for Bobby Jones. That would leave W Diamond with Hickey, HSM and Misook. Sources believe that, eventually, the business will be pared down to just the core operations, which are Hickey and HSM. If Hickey goes to Samuelsohn and Misook is licensed to another operator, HSM would be the remaining asset.
Salter declined to comment on the specifics of his long-term plan, saying only: “Now that the business has been stabilized, we’re going to be making sure the brands are in the right place with the right partners.”
In addition to HMX, Authentic Brands in January purchased Judith Leiber, Adrienne Vittadini and Taryn Rose from the Schottenstein Luxury Group for an undisclosed sum. It also has the licenses for Marilyn Monroe, Prince, Tapout, Sportcraft and Silverstar.
Authentic Brands operates in partnership with Leonard Green & Partners and its mission statement is to “build a global portfolio of world-renowned brands.”
Samuelsohn’s high-end men’s wear is carried in Nordstrom, Saks Fifth Avenue, Neiman Marcus and Harry Rosen. To celebrate its 90th anniversary, the company introduced a super-high-end line for spring called 1923 Black Label, designed by Arnold Brant Silverstone, president of marketing, sales and design. Black Label will retail for $1,795 to $2,495, while the core Samuelsohn collection opens at $1,095 and goes up to $1,595.
In a recent interview, Silverstone said the company’s business with Nordstrom has risen 50 percent over the past two years and 2012 was the company’s biggest volume year with double-digit growth. Projections for 2013 are for a 20 percent increase over that.