LIDA RESTRUCTURES FOR STABILITY
Byline: Michael McNamara
NEW YORK — “We’re looking to create more flexibility and stability and to get the company back to where it should be.”
That’s how Isaac Kier, chairman and chief executive officer of Lida Inc., sums up his company’s massive executive restructuring effort, which was hammered out over the past month and completed last week.
In effect, Kier, along with his brother Nelson, Lida’s president, are turning over the day-to-day manufacturing and marketing responsibilities to managers in the vertically integrated converter’s four key business segments — new markets, printed fabrics, swimwear and circular knits.
Lida, which went public in May 1992, has been posting losses almost every quarter since then, primarily due to start-up problems, lack of communication among the various businesses and a failure to consistently get the right product to the right market. The executive shifts were essential, said Isaac Kier.
Among the key personnel moves made by the company:
Jon Adelman has been named executive vice president and chief marketing officer, overseeing the three business units. It is a new post.
Alan Slobotkin has joined Lida as vice president and general manager, circular knit Lycra spandex fabrics, succeeding Adelman.
Tom Gayer has also joined Lida, as vice president and business manager for all prints, excluding swimwear. Gayer succeeds Howard Hauptman, who left the company to join Marcus Bros. Textiles (see separate story).
Shelly Garfinkel has been promoted to vice president, swimwear prints and knits. Garfinkel had been market manager in that area and will retain those duties.
Gary Kabler has been promoted to manager, new markets. Kabler, a 15-year Lida executive, was previously an account executive. In his new post he is charged with overseeing the company’s business in all non-traditional women’s wear markets.
Slobotkin, Gayer, Garfinkel and Kabler all report to Adelman.
In two other key appointments:
Helene Stein has joined Lida as head stylist, succeeding Carol Howcroft, who also left the company and is now at Marcus Bros. Stein, who was previously print designer at Euro-American Textiles, reports to Gayer.
Charles McCamy, who in July joined Lida after 3 1/2 years as president of the Caro Knit division of Dixie Yarns, has been named chief operating officer, succeeding Nelson Kier. McCamy, who had been chief of operations, overseeing Lida’s three North Carolina plants, will retain those duties as well. McCamy reports to Isaac Kier.
“Our theory has been that if there are people out there who can do a better job, we’d much rather have them do it, and [Nelson and I will] tackle other areas,” said Kier, interviewed at Lida’s offices here. Kier noted that he and Nelson will take on supervisory-type roles and focus their attention on such things as market expansion, acquisitions and new markets. “We now have in place, I feel, a management team that is superior in most respects to what [Nelson and I] were able to do, and we will let them carry the ball,” Kier said. “That’s not to belittle what we did, but we are just very confident in their abilities.”
“The theory behind the chief marketing officer post is that we need someone to synergize the various groups and maximize their potential and to present the company in a more unified focus to manufacturers and retailers,” Kier said.
“We had talented people before, but they were lone wolves,” Kier added. “In today’s world, you need to have an organization that works together. We had power cliques that were very disruptive.”
“We now have an opportunity to build our business around being a full-service supplier to our customers, to become more user-friendly,” said Adelman, who joined Lida in 1992, following a 17-year stint at Milliken & Co., where he was a business manager.
The Kier’s are banking on these changes to help Lida get back into the black. In the third quarter ended Oct. 2, hit by $3.4 million in extraordinary charges, Lida lost $3.6 million.
The company showed a deficit of $3.1 million in working capital as of Oct. 2, but said its bankers have agreed to restructure existing loans and revolving credit facilities that would transform notes payable into long-term debt. The changes bring working capital to $10 million.
In the 1993 quarter, Lida lost $1.7 million, after a tax credit of $1.1 million.
Sales in the most recent quarter rose 12 percent to $22.3 million from $19.9 million.
In the nine months ended Oct. 2, the company lost $3.8 million on sales of $67.7 million. For the year ended Jan. 2, 1994, Lida posted a loss of $3.4 million on its sales of $88.5 million.
“I didn’t come into this situation blindly,” said Slobotkin, who spent 20 years at Burlington Industries, most recently as executive vice president in the company’s knitted fabrics division. “But we have the product and the people to move this thing forward. Innovation has never been a problem for Lida; execution has.
“People have to be complementary,” Slobotkin added. “Creative, sales and manufacturing all have to be on the same page.”
“The challenge I have is to develop enough printed product for our sales people,” added Gayer, who was previously a vice president at Missbrenner, a converter here. “We are going to be a tough competitor.”
One product Gayer will be chiefly involved in is Corona, a proprietary printing process that allows a deeper penetration of dyestuffs on Lycra-containing fabrics. The product was introduced a year ago.
“It’s done reasonably well, but it hasn’t come along as quickly as we would’ve liked, primarily because it’s a price-sensitive product,” said Isaac Kier, noting a printed fabric with the Corona process costs between 10 and 20 percent more than fabrics without it. “We feel that through the department stores, the product can gain a wider acceptance. We are going to promote it and try and find more end uses in sportswear and ready-to-wear.”
Some of Lida’s customers, particularly those who have dealt directly with Adelman, are encouraged by the changes.
“We’ve been buying from them on and off over the last five years, but this past year, we’ve been a big customer, and a lot of that has to do with Jon,” said Marc Bohbot, president and ceo of Bisou Bisou, Los Angeles, a contemporary sportswear manufacturer. “Jon is very active, sharp and quick, and doesn’t put things off,” Bohbot added. “Previously, Lida was not as responsive to problems. If there were damaged goods, we’d get no response. Or the goods were late.”
Bohbot went on to say that nine months ago, Bisou Bisou and Lida “had a last-chance meeting. Lida, but most especially Jon, has responded.”
Mark Steinman, president and chief operating officer of Chorus Line, Los Angeles, said, “We’ve always found them to be reliable, and we intend to keep doing business with them. If there is a problem in that business, it’s that they are a vertical operation, and they have to keep the machines running.
He noted that his firm has been doing business with Lida for about 15 years. All of Chorus Line’s operating divisions — All That Jazz, Tickets, Molly Malloy, More Jazz, Jazz Petites, Jazz Kids and Jazz Sport — have utilized Lida fabrics.
Summing up the current status of the company, Kier said, “Our unit sales are up, but now it’s time to become profitable again.”