NEW YORK — Premium denim label Earnest Sewn has pared down its operations here in a bid to reduce costs, streamline operations and move toward profitability.
After several staffers were laid off from the New York office on Tuesday, speculation regarding the brand’s financial health and future started to swirl. An e-mail sent by the brand’s former director of public relations said the New York office was closing as of Tuesday. That e-mail was later amended to say the office would remain open, and that all online and bricks-and-mortar stores would continue to operate.
The brand’s management told WWD on Thursday the layoffs were part of a number of changes that have been made over the last several months intended to reduce costly overhead and create better operating efficiencies.
“We’re trying to have a more rational operating model,” said Brian Cytrynbaum, the Montreal-based entrepreneur and owner of T-shirt maker Majestic Mills, who leads the investment group that purchased a controlling stake in Earnest Sewn in January 2008.
According to Cytrynbaum, back office administrative operations such as press relations and advertising are being moved to Montreal to be handled by his existing infrastructure, eliminating redundancies. Cytrynbaum acknowledged that poor economic conditions have played a part in spurring the moves.
“Our overhead for what currently is happening required that we make some changes,” he said, adding current volume made it difficult to make money given the cost structure of the New York office.
Michael Press, president of Earnest Sewn, said the New York staff has been cut from nine people to around five over the last three months. The label’s design staff was transferred from New York to Los Angeles about four months ago, joining its production and warehouse operations.
“This is a tightening up of the company and it’s an intelligent tightening up,” said Press.
Press and Cytrynbaum stressed sales will continue to operate out of New York, as well as the company’s retail operations.
“It looks like the brand will be profitable moving forward under the new structures,” said Cytrynbaum.
Scott Morrison, Eleanor Ylvisaker and Lori Jacobs launched Earnest in 2004 after working together at Paper Denim & Cloth. After selling the controlling stake, Morrison ceded his position as president to Press, but continued on as creative director with responsibility for overseeing retail expansion. Ylvisaker maintained her position as public relations director. Jacobs, who served as head of sales, left the company a month after Cytrynbaum’s investment.
In March, Morrison and Ylvisaker said they were leaving the company, citing differences over management and overall direction of the company. They maintain minority stakes in the brand.