Byline: Karyn Monget

NEW YORK — San Francisco Mercantile Co. has signed an agreement to acquire the Lanz of Salzburg trademark and worldwide copyrights, as well as its sleepwear inventory.
The deal with Lanz Inc. is expected to close March 25, said Laney Thornton, chairman and chief executive officer of San Francisco Mercantile.
Lanz, whose volume fell sharply last year, is best known for the granny gown. San Francisco Mercantile is known for its Eileen West brand of sleepwear and foundations.
Thornton would not reveal the purchase price, but said the acquisition of the Lanz name and certain assets would cost “under $10 million.”
“The purchase price is essentially the inventory, some 100,000 pieces for fall distribution,” said Thornton, “but payment for the trademark will be in the seven figures.”
This latest development follows a rocky romance between the family-owned Lanz firm and Anvil Capital Partners in Philadelphia, which said in October it had agreed to purchase Lanz for “slightly” more than an estimated $10 million to $15 million.
Thornton, however, said that deal was never consummated. He said that about six weeks ago the agreement for some executives of the Anvil operation — and Lens Inc., its leveraged buyout unit — to buy the Lanz name and assets fell through.
“They were undercapitalized, and there’s no room for error,” Thornton said. “Lens and Lanz contacted me and thought it would be appropriate that I step in and do a friendly takeover.”
When the Anvil deal was announced, Scott Soura, a partner in the firm, said the investors had “big plans” to diversify the 58-year-old Lanz name beyond its specialty in cotton flannel sleepwear. Soura could not be reached for comment on Friday.
Lanz, which had an estimated annual wholesale volume of more than $22 million in 1995, and around $50 million in 1994, is one of the most widely recognized innerwear brands in the country. The firm also produces a line of sleepwear bearing the Little Women label, which is a license of the Sony Signature division of Sony Pictures, and several home accessories licenses. A dress division closed in April 1995.
The Lanz company was founded in 1938 by Warner Scharff, his brother, Kurt Scharff, and Sepp Lanz. Kurt Scharff and Lanz have since died.
San Francisco Mercantile, a $30 million innerwear and licensing operation in San Francisco, was formed in 1978 by Thornton and his partner, designer Eileen West. The firm produces sleepwear under the Eileen West and Queen Anne’s Lace by Eileen West labels. The company has a licensing pact with Biflex to produce bras and panties bearing the designer’s name, as well as several home accessories licenses.
Thornton said Warner Scharff, Lanz’s former chairman, and his daughter, Alexis Scharff, former president, would no longer continue as consultants for the Lanz firm. Alexis Scharff left in October. Christopher Scharff, the son of the former chairman and the former vice president of marketing, left the firm in September. He now is director of international sales at St. John, Irvine, Calif.
None of the Scharffs could be reached for comment.
Successors in the posts of chairman and president haven’t been named, said Thornton. He did say, though, that Joan Maxwell, vice president of marketing at San Francisco Mercantile, will be acting sales manager.
As for how Thornton and Eileen West plan to position the Lanz brand, Thornton said: “Lanz was a very seasonal business, and it was very hard to run as a stand-alone company. This is perfect for us, because we have a year-round sleepwear business.
“We have historically dealt with the same fabric vendors and specialized in natural fibers. We also have very good relationships with most of their current retail accounts. We plan to improve product mix, customer service and consumer awareness of the brand.”
“Going forward, this is going to be real kicky line,” West said. “There are some great traditional silhouettes, but the collection could be updated with new trims, prints and shapes.”
West added that new prints and colors will follow the “more sophisticated, romantic palette of the Eileen West collections.”
The Lanz line will continue to be shown here at its 1407 Broadway showroom. The wholesale price range for fall will be 15 to 20 percent below last year’s prices of $16 to $20 for key items.
Talking about the dissolution of the firm’s established dress division late last year, Thornton said, “We want to concentrate on sleepwear and brand management of licensed goods.”

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