CALVIN KLEIN SETS PACE FOR WARNACO INTIMATES
NEW YORK — Gross profits for Warnaco’s intimate apparel business in 1996 grew 16.7 percent to $302.4 million from $259.2 million, fueled by a hike in sales of Calvin Klein underwear.
Sales of intimate apparel grew 16.4 percent to $m802 million from $689.2 million, according to Warnaco’s new 10-K.
Warnaco said intimate apparel’s gains were driven by a 53 percent increase in sales of Calvin Klein underwear and intimate apparel, to $244.3 million from $163.6 million.
In addition, the latest year included an increase of $55 million in sleepwear revenues as a result of the acquisition of GJM in February 1996 and an additional $47.5 million from the July acquisition of Lejaby, a French intimate apparel maker.
These gains were partly offset by a reduction of more than $75 million in shipments to Avon Products and Victoria’s Secret.
Gross margins in the intimate apparel group inched up to 37.7 percent of sales from 37.6 as a result of improved manufacturing efficiencies and an increase in the mix of Calvin Klein merchandise, offset by slightly lower margins in its GJM private label sleepwear business.
Besides GJM and Lejaby, Warnaco acquired Nancy Ganz Bodyslimmers in June 1996.
Warnaco’s intimate apparel business also includes the Warner’s, Olga and Speedo lines for the department store channel, the Van Raalte private label line for Sears, and Fruit of the Loom bras for mass merchandisers.
It introduced a Marilyn Monroe line for the better market in December 1996.
Intimate apparel operations accounted for 83.7 percent of gross profits and 75.2 percent of sales last year.
In its men’s wear business, gross profits grew 25.9 percent to $44.7 million in 1996, while sales increased 15.5 percent to $214.4 million.
Sales of Chaps by Ralph Lauren men’s sportswear brand climbed 23.5 percent to $170.7 million, while the Calvin Klein men’s accessories line, launched in third quarter of 1995, grew to $11.1 million from $3.9 million in 1995.
These gains were offset by lower sales in Hathaway dress shirts. The Hathaway operation was sold in November 1996.
At Warnaco’s outlet stores, gross profits advanced 23.3 percent to $18.5 million, and sales gained 14.8 percent to $47.4 million.
Warnaco’s overall gross profits moved ahead 18 percent to $365.6 million, while sales moved up 13.2 percent to $1.06 billion.
By region, operating profits in the U.S. rose 4.9 percent to $149.7 million, and sales gained 11.8 percent to $902.6 million.
In Canada and Latin America, operating profits fell 5.1 percent to $9.4 million, but sales gained 14.6 percent to $57.8 million. In Europe, operating earnings surged to $15.4 million from $2.4 million, as sales more than tripled to $50.9 million from $15.4 million.
The 10-K notes Warnaco spent $59.5 million on advertising last year, up from $41 million.
As reported, Warnaco’s bottom line showed a loss of $8.2 million in 1996 after $89 million in charges to realign intimate apparel operations, exit the Hathaway shirt business and terminate its merger with Authentic Fitness. Net sales totaled $1.1 billion.
Meanwhile, the firm’s proxy statement showed Linda J. Wachner, chairman, president and chief executive officer, received $9.3 million in total compensation in 1996, down from a $10.2 million package in 1995.
The decline stems from a reduction in restricted stock awards, to stock valued at $4.4 million from $6.1 million the prior year.
Her base salary rose to $2.55 million from $2.45 million, annual bonus was unchanged at $1.3 million, and other annual compensation grew to $1.02 million from $361,805.
She also received options for 1 million shares exercisable at 24 3/8 each. In 1995, she was awarded options for 1,000 shares exercisable at 16 3/8 each.
Shares of Warnaco closed at 30, down 1/2, Monday on the New York Stock Exchange.
William S. Finkelstein, senior vice president and chief financial officer, received salary, bonus and restricted stock awards of $1.2 million last year versus $805,713 in 1995; and Stanley P. Silverstein, vice president, general counsel and secretary, $973,221 against $543,636.
Wallis H. Brooks, vice president and controller, earned $281,141 against $156,416.
Brooks resigned from Warnaco in February 1997 to become senior vice president and treasurer at Authentic Fitness Corp., another firm headed by Wachner.
Carl J. Deddens, who was appointed vice president and treasurer in March 1996, earned $360,437 last year.