Byline: Eric Wilson

NEW YORK — Pegasus Apparel Group executives are set to begin scouting production and distribution partners for the Daryl K business in the next week and are targeting manufacturers along the lines of Aeffe, Gibo, Staff International and Ittierre to take over the collection, sources said.
Susan Sokol, president and chief operating officer of Pegasus, would not comment on the company’s specific plans for the division, but sought to “reconfirm” Pegasus’s commitment to the Daryl K brand following the announcement on Friday that the company would not be producing its fall collection.
“This was a very difficult decision,” Sokol said. “We put a lot of thought and energy into what we decided to do, and we decided that we would have the best positioning for Daryl K by finding the right licensing or manufacturing partner.”
Apart from the obvious benefit of cutting the overhead of design and production staffs, Sokol pointed out that if Pegasus partners with a company with established distribution in Europe or the Far East, “we would easily double our topline sales. I also think we could probably improve our initial gross margins by 10 points.”
Cutting the fall production — and related staff positions in designer Daryl Kerrigan’s employ — was a difficult move, Sokol said. The company is also closing its underperforming Los Angeles store on Melrose Avenue. These are decisions that insiders say are straining the relations between Pegasus and Kerrigan, much in the vein that speculation is mounting over ongoing troubles with eveningwear designer Pamela Dennis.
“I’m not telling you she’s thrilled with the move,” Sokol said. “We’re only putting the business on temporary hold. We understand this is a high-profile business, and it’s one we are committed to. I know this is not the ideal situation and I know this is not the best of scenarios, but this is what we need to do to continue to grow the business going forward.”
Sokol described the crux of Pegasus’s strategy with Daryl K as creating a new foundation for that business. Given the often complex nature of Kerrigan’s designs and the details commonly found in her clothing, it could be helpful for the firm to outsource its production and distribution to a specialist in sourcing and sample development, or possibly to a second company, as well, to handle the denim line, she theorized.
“It would be a tremendous assistance to us and our business to leverage off their existing infrastructure,” Sokol said. “It’s a question of going to someone who has these things in place already.”
Sokol added that Pegasus will retain the services of public relations firm KCD to continue its representation of Daryl K, in an effort to maintain an editorial awareness of the brand during its seasonlong absence at retail.