Byline: Karyn Monget

NEW YORK — San Francisco Mercantile Co. has licensed its three sleepwear brands to Charles Komar & Sons: Eileen West, Queen Anne’s Lace by Eileen West and Lanz of Salzburg.
The three brands will be part of a new company here formed by Komar, called EWL Sleepwear Inc. At a time when major stores are trading up to more upscale merchandise and brands, the new venture is expected to bolster business and market share for both companies.
“It’s a win-win situation, and we are very excited about it,” said Laney Thornton, chairman of San Francisco Mercantile.
Under the agreement, designer Eileen West will continue to design and merchandise the three collections at the San Francisco Mercantile headquarters in San Francisco. EWL staff will operate the Eileen West showroom here at 1450 Broadway. The new product is to be ready for the November market.
The Komar company will manufacture, market, sell and distribute the three brands beginning with 1998 shipments. A sales force from the existing Eileen West and Lanz staffs will work for EWL Sleepwear and will report to Larry Solomon, president of the new entity. Solomon, who was vice president of sales for the Eileen West and Lanz brands at San Francisco Mercantile, will report to Charles Komar, president and chief executive officer.
Thornton said that San Francisco Mercantile will continue to operate and oversee its other licensees, which include bedding with Renaissance and a foundations line produced by Biflex Inc. The firm, though, will shut its production and warehouse facilities. The accounting department will be greatly reduced, eliminating 41 of 56 employees, he said.
“It’s going to be a smooth transition. Our employees will be working 60 more days, and they will have a severance package,” Thornton said.
Asked why the brands were being licensed, Thornton replied: “This will allow us to be more creative….Up until three years ago, we were a manufacturer. Then, we got into importing to become a worldwide resource. It was a lot of work.
“I think the lines will really have some [sales] growth now. We never got to that efficient-size level. Companies have to be at the $50 million level to be efficient,” Thornton said. He noted that sleepwear sales under the Eileen West, Queen Anne’s Lace by Eileen West and Lanz labels generated wholesale sales of about $20 million in 1996.
Eileen West noted, “There were a lot of reasons we were so attractive to the Komar company. They didn’t feel they had a designer product for major specialty stores like Neiman Marcus or Saks Fifth Avenue.
“It’s very hard to build an unknown designer brand these days. I don’t think our brands will compete with Komar’s brands,” West said, noting that distribution will continue to be aimed at major department and specialty stores and catalogs.
Charles Komar said he expects the “biggest growth” will be in knit sleepwear, saying, “Knits account for about 50 percent of the sleepwear market, and Eileen West isn’t in that. We plan to get into that in a significant way. We are focused on growth, but our priorities also include getting the product perfect and deliveries on time,” continued Komar. He added that he also plans to source for U.S.-made fabrics, such as cotton batiste, which are “superior in quality.” Sales the first full year are projected to grow 20 to 25 percent for the three brands, he said.
Regarding pricing, Komar said prices haven’t been finalized but will generally be “slightly lower” than they have been. Wholesale prices for the Eileen West line typically has been $18 to $38; Queen Anne’s Lace is $45 to $100, and Lanz is $16 to $25.

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