Paul Buxbaum, the new chief executive officer of Haggar Corp., has spent a career repairing or liquidating damaged apparel firms. So when he was named chief executive of the casual pants brand in March, it led to rampant speculation as to the company’s health.
As principal of the Buxbaum Group, his background included the overhaul of then-faltering juniors’ brand Rampage in 2005 and its acquisition by Iconix Brand Group Inc. The same year, he facilitated the sale of a 50 percent stake in Seven For All Mankind to Bear Stearns. This track record, while respected, also prompted questions about his intentions for his new ward.
Concerns were further flamed by the circumstances of his arrival. Terry Lay, Buxbaum’s predecessor, departed Haggar after only a year and a half at the helm after selling the brand’s women’s business, terminating its sportswear license and dismantling the private label division. Uncertainty was further exacerbated by the lack of concrete information about the firm, which went private in 2005 after it was acquired by three private equity groups — Infinity Partners, Symphony Holdings and Perseus LLC — for $212 million.
So Buxbaum’s first task as leader of the Dallas-based concern was to quell market fears his job was to disband the company.
“I’m not here to liquidate Haggar,” said Buxbaum. “I have a relationship with these stockholders and they asked me to come after Terry [Lay’s] retirement to create long-term value for this brand.”
When asked if his mandate at Haggar was to turn the company around, Buxbaum demurred. “Given the economy today, everybody is going through some reorganization,” he said. “This company has gone through a challenging period and made tough choices. I’m here to pick up that torch.”
Reorganization is one of Buxbaum’s calling cards. At Rampage, which was near bankruptcy, he improved the company’s inventory management and accelerated deliveries.
“He’s just far enough and close enough to a company that he can be very objective,” said Larry Hansel, founder of Rampage who worked with Buxbaum during the turnaround. “He has a liquidation mind but can run a business on top of it.”
Perseus, which hired Buxbaum, said his experience as a liquidator didn’t factor into his appointment. “We were more impressed with his knowledge of the brand and his skills at running a company efficiently,” said Dave Davis, senior managing director at the investment firm. “The message from the market was universal: this is a very good brand guy and a good operator.”
The Haggar that Buxbaum inherits is a smaller one. Before going private, Haggar reported annual revenues of just under $500 million. But women’s and private label accounted for one-third of the top line. Retail bankruptcies — like Gottschalks Inc. — have also pressured sales. However, the company said tighter assortments have led to greater profitability this year, and while the recession has meant the loss of some retail partners, it has also highlighted Haggar’s value-oriented apparel. For the first four months of this year, Haggar said it’s beating plan by double digits. J.C. Penney, who along with Macy’s and Kohl’s account for most of Haggar’s business, declined to be interviewed about the performance of the Haggar brand.
Buxbaum said he plans to leverage the brand’s recent success by adding new categories via licensing. “When you walk on the floor for Haggar, we know it’s a brand choice, not an item choice,” he said. “A bigger licensing strategy will help us solidify that position.”
Last month — just after Buxbaum’s assignment was announced — Haggar inked a deal for men’s tops. A license for sweaters is forthcoming. The company also said new collections for its core items — casual pants, dress slacks and suit separates — are in the works. Buxbaum also plans to take advantage of the company’s other, little-used trademarks, which include Enterprise and Haggar Black Label. As a supply chain guru, Buxbaum will also be tinkering with the back end. “Over the short term, I will continually move on our efficiencies; we can get immediate results in the supply chain,” he said.
As an executive accustomed to working in the background, quietly fixing the mechanics of damaged companies, Buxbaum, sources say, prefers to stay out of the limelight. But his new role as the public face of a large men’s wear company suggests Buxbaum will shift his focus from a short-term savior to a long-term operator.
“Talking to investors, they are not thinking about a sale. This is a long-term investment,” he said. “I have no time limit here. This is an open-ended engagement.”