There’s been a changing of the guard at Hampshire Group.
This story first appeared in the January 23, 2013 issue of WWD. Subscribe Today.
On Tuesday, the sportswear manufacturer named Paul Buxbaum chief executive officer, succeeding Heath Golden, who resigned as president, ceo and a board member. Golden has been with Hampshire since 2005 and has been ceo since August 2009.
“Heath Golden has overseen Hampshire through a difficult period in its history and led a transformation of our business, resulting in a company with prospects of growth and profitability,” said Peter Woodward, chairman. “On a personal level, we wish him the best.”
The change pushed shares of Hampshire up 14.8 percent to $3.10 in early trading. Hamsphire shares closed at $3, up 30 cents, or 11.1 percent.
Buxbaum, 57, joined Hampshire in 2011 after the company bought Rio Garment. He is a member of the company’s board and was previously ceo of Haggar Clothing Co., a post he left in April. He is also the principal at the Buxbaum Group, a turnaround consultancy and one of the largest liquidators and appraisers of retail and wholesale inventories in North America.
The company said long-time board member Herbert Elish would also retire.
Buxbaum said that as Hampshire’s “largest independent shareholder,” the board decided that “someone with my experience would be a better fit to grow the company in the future.”
He credited Golden with doing “a nice job managing through legal and administrative” issues. He said his goals for Hampshire are to grow the company’s “platforms” that include its sourcing arm, its recently expanded licensing deal with Dockers for knits and wovens and its Rio manufacturing division. “We’re creating a product development department that we look at as an opportunity. Everybody is looking for the ability to go factory-direct today.”
Buxbaum also said he would consider acquisitions of “middle market companies” that can “leverage” Hampshire’s internal synergies. “That’s my background. I buy companies and make them strong and healthy.”
Hampshire said it expected to be profitable in the second half of 2012, on an adjusted basis before interest, taxes, depreciation and amortization.
Golden said: “At this point in time, I believe the company is well positioned for profitable growth and that Paul Buxbaum has the skills required to drive operational execution. I depart knowing that the company is in capable hands and look forward to observing its continued growth.”
He could not be reached for additional comment Tuesday.
Under the terms of the separation agreement, Golden will receive 18 months salary, or $675,000, as well as a one-time payment of $10,000 for providing consulting services to the company through Feb. 14.
In the three months ended Sept. 29, Hampshire cut its net loss to $1.5 million, or 20 cents a diluted share, from a loss of $1.8 million in the third quarter of 2011. The operating loss declined by more than half, to $1.4 million from $3 million a year ago, as selling, general and administrative costs fell 3.7 percent to $8.3 million.
Sales rose 8.4 percent to $36.3 million from $33.5 million.