LESLIE FAY TAPS TOP EXECS
Byline: Arthur Friedman
NEW YORK — As it continues to climb back to a position of prominence on Seventh Avenue, the Leslie Fay Co. on Tuesday named two top executives with extensive experience in brand building.
W. John Short, most recently president, chief executive officer and chief operating officer of Joe Boxer Corp., is the new ceo of the corporation and also takes the new post of chairman of the executive committee. In the ceo role, he succeeds John Pomerantz, who remains chairman. Pomerantz, whose father Fred founded the firm in 1947, had reassumed the ceo role on a temporary basis following the departure of John Ward in January.
Linda Larsen German, formerly vice president of corporate merchandising at Liz Claiborne, has been named president. German spent 18 years at Claiborne, where she helped found the Elisabeth large-size division, and was also president of the sportswear division and LizSport unit. German left Claiborne in 1998 and since then has run her own business, Larsen Associates Inc., where she was a consultant to major retail and wholesale companies.
Before joining Joe Boxer in January 2001, Short was executive vice president-North America at Sunglass Hut International, where he oversaw the company’s 2,200 stores in the U.S. and Canada. Previously, Short spent eight years with Esprit, where he held the positions of ceo of Esprit Europe; ceo of Esprit International, the group’s licensing arm, and president and chief operating officer of Esprit Far East. Prior to that, Short spent 10 years at the international banking group of Citibank.
Ward, an 11-year veteran of Leslie Fay who had become ceo in 2000, has since been named president of European Design Group, a 12-year-old private label manufacturer, as reported. Tuesday’s appointments were the result of an extensive executive search by Marvin Laba & Associates, Pomerantz noted.
Speaking of the new executives, Pomerantz said, “John’s strategic vision, leadership and operating knowledge are a perfect fit with Linda’s product knowledge, marketing skill and consumer understanding. I look forward to working with them both.”
Short noted, “The company’s strong customer relationships, my background and Linda’s product and marketing strengths make a powerful combination.”
In addition to overall responsibility for Leslie Fay, Short will directly manage operations and strategic planning. German will oversee all product and design development, marketing, advertising and sales.
Pomerantz will continue to play an active role in customer relationships and identifying new ventures.
Rounding out senior management, Warren Wishart continues as chief operating officer and chief financial officer.
Since emerging from a four-year stay in Chapter 11 bankruptcy in 1997, Leslie Fay has slowly rebuilt itself with a multi-brand strategy that has combined acquisitions and licenses. Most recently, the dress specialist has expanded its licensing arrangement with Liz Claiborne Inc. to include eveningwear, adding to the two-year-old day dress license.
Also this month, Leslie Fay sealed a licensing deal with American Apparel Co., a private label manufacturer, to produce a moderate-price separates collection, called Leslie Fay Separates, this fall, with projected first-year sales of $5 million wholesale. The launch into separates marks the fourth license for Leslie Fay, after handbags, shoes and hosiery. Last month, it brought back its Outlander label at the moderate level and with an emphasis on tops, more novelty driven than its previous incarnation. The label was retired about four years ago. The first collection will bow in August with six groups of related knit separates totaling about 100 pieces. Wholesale prices range from $10 for a cotton shirt to $20 for an acrylic boucle car coat.
The company expects the relaunched label to do about $5 million wholesale for the first six months in business, spread over about 400 to 500 department and specialty store doors for fall and holiday.
Contemporary ready-to-wear label Trio New York became part of Leslie Fay’s stable in November.
At the time, Pomerantz, whose company purchased the Cynthia Steffe brand about a year ago, said Trio New York will run the same way that Cynthia Steffe now runs. Leslie Fay will control financial matters and Trio president Steven Garfield will oversee sales, while his wife, Judy, will handle the overall design of the collection.
With the stronger foundation, Trio is expanding into eveningwear, with a division called Trio Black Label, as reported. The line will feature one and two-piece special-occasion looks, using higher-end fabrics than the main line.
Trio New York is projected to have sales of about $12 million this year, while sales for the Black Label line are planned at $3 million.
Executives at Cynthia Steffe and Trio have pointed to Leslie Fay’s expertise in sourcing and distribution as a big plus in helping them operate profitably and expand their businesses.
In addition to these brands and its signature dress label, Leslie Fay produces the moderate-priced Leslie Fay Haberdashery and Joan Leslie lines, as well as the better-priced David Warren and Rimini social occasion and eveningwear collections.
Leslie Fay’s storied 55-year history received its biggest blemish in 1993 when it was rocked by a $130 million accounting scandal in which false financial entries turned profits into losses in 1991 and 1992, causing restatement of those periods and forcing the company into bankruptcy in April 1993.
Paul F. Polishan, former chief financial officer of Leslie Fay, who was convicted in July 2000 of orchestrating the elaborate financial fraud, was sentenced to nine years imprisonment last year.
Former controller Donald F. Kenia was sentenced in October 2001 to two years in prison, two years of supervised release and 500 hours of community service.
Partially as an aftermath of that, in November 2001, Leslie Fay was taken private when the company’s remaining shares were acquired by Three Cities Research, its majority shareholder, together with Constable Partners and members of company management. Under the terms of the agreement, approximately 1.6 million shares were purchased at $5 per share or $8 million.
At the time, the firm reported that order cancellations and price haggling led to a net loss in its final quarter as a publicly traded company. For the third quarter ended Sept. 29, Leslie Fay saw a loss of $1.1 million, compared with last year’s profits of $760,000. Sales declined 20.5 percent to $48.5 million.
For the nine months, the company recorded a net loss of $1.1 million versus net income of $4.1 million. Sales fell 16.7 percent to $144.2 million.