NEW YORK — The economy has claimed another fashion victim — the union between Peter Som and Creative Design Studios, the subsidiary of Lord & Taylor LLC.
This story first appeared in the January 9, 2009 issue of WWD. Subscribe Today.
Less than a year and a half after striking a partnership, Som and CDS, which was created in 2007 to work with American talent, both funding and nurturing them in various ways, have agreed to go their separate ways.
“We have realized that our strategic interests are no longer aligned and feel that this is the best direction for our company at this time,” said Som. “While these are challenging times for luxury brands both small and large, it’s an opportunity for us to reshuffle our deck of cards. I remain creatively inspired and am looking forward to exploring opportunities where we can grow with the right partner, or on our own.”
Richard Baker, chief executive officer of Hudson Bay Trading Co., which was formerly known as NRDC Equity Partners and is the parent company of Lord & Taylor, said, “Peter is incredibly talented and we wish him the best of luck and know he will be very successful in his future endeavors.”
Because of the split and the current market conditions, Som will not stage a runway show during New York Fashion Week next month, but Elana Posner, who coowns Peter Som Inc. and serves as Som’s president and ceo, said the company is exploring options for the fall season.
“We had already planned on reducing the size of the collection,” Posner said. “We will work with our key accounts. We are exploring every option, whether it be a showroom presentation, a look book or private sales and press appointments. We plan to find a solution that meets the needs of our retailers and the press, that is also cost-effective.”
The situation underscores the difficulty relatively young designers have in maintaining and growing their businesses at a time when many private equity investors are facing their own financial woes in the recession.
“Peter’s talent is enormous but the realities of today’s marketplace have forced us to reevaluate all of our strategic partnerships,” said Susan Davidson, ceo of CDS. “We need to focus all of our resources on our core businesses — Lord & Taylor and The Bay department stores.”
At the time of the deal with NRDC, market sources pegged the initial investment in Som at about $10 million for a two-thirds interest in the company. As part of the deal, however, Som had control over the use of his name even if the partnership dissolved.
“We don’t have any criticism about NRDC’s participation,” Posner said. “Strategies have changed and their interest in American designer brands is not a priority for their business. Economic conditions were different when we entered the agreement and they supported Peter Som completely until this juncture.
“Right now we are reviewing all of our options for the future,” Posner added. “We feel really positive about this announcement as it allows us to find a partner that is strategically aligned with our needs.”
For the time being, the company will remain self-financed. Som is already in the process of designing a fall collection.
For Som, this news is the second blow in recent months. The designer joined Bill Blass as creative director of women’s wear in 2007, and the second gig offered him an additional income and platform to build his name and following. His collections for Blass were generally well received, but shortly after his arrival, the fortunes of Blass owner NexCen Brands Inc. started to crumble, and after months of speculation, Som left Blass in October. NexCen closed the Bill Blass Couture division last month, let go the 60-plus staff and sold the brand to Peacock International Group for $10 million.
Som started his namesake brand in 2001, and quickly developed a following for his elegant, feminine collection in the tradition of American sportswear. His collection is sold in stores such as Bergdorf Goodman, Neiman Marcus and Saks Fifth Avenue, as well as internationally in markets like Russia, South Korea, Canada and Saudi Arabia.
Kim Vernon, founder of the Vernon Co., worked with Posner and Som on the termination of the partnership.
“It’s a perfect example of how every business — large or small — is reevaluating strategic plans they made less than 18 months ago,” Vernon said.
As for the future, Posner said: “We will work very closely with our retailers to maximize sales. We shipped resort early, and will do the same for spring. Peter and I are extremely grateful for [the retailers’] support. We know it’s a challenging time in the industry as a whole.”