TARRANT APPAREL LICENSING JANE DOE

Byline: Katherine Bowers

LOS ANGELES — Tarrant Apparel Group is turning to licensing in an effort to make its Jane Doe young contemporary sportswear division into a less anonymous entity.
Gerard Guez, chief executive officer, said the company is in final-stage negotiations with Rampage about a sportswear license. Licensing deals already inked include a leather apparel license with Los Angeles-based designer Melinda Fletcher and a children’s wear line.
The Los Angeles-based private label manufacturer, which does the majority of its business in denim and twill bottoms, acquired a 51 percent stake in Needletex, which owns the Jane Doe label, in April 2000.
Guez said the company is putting off a planned rollout of Jane Doe stores until 2004. “We need to get the licensing running smoothly before we think about [licensing] for retail,” he said.
The announcement that Tarrant will cease production on the trendy Jane Doe label comes as Tarrant Apparel Group puts finishing touches on vertically-integrated production in Mexico. The company has spent the past 20 months consolidating 26 subcontractors to three facilities capable of producing 25 million garments a year, Guez said.
However, costs associated with those efforts contributed to losses for both the fourth quarter and year, for which results were released late Tuesday.
In the quarter ended Dec. 31, the company posted a net loss of $7.8 million, or 49 cents a diluted share, versus a loss of $2.2 million, or 14 cents, in the final quarter of 1999. Sales dropped 10.6 percent, to $81.4 million from $91 million in the year-ago quarter.
Chief financial officer Scott Briskie blamed the roughly $10 million falloff in sales on a softening retail environment that “caused [our customers] to postpone or even cancel some shipments.”
For the year, the company lost $2.5 million, or 16 cents a diluted share, compared to net income of $12.9 million, or 79 cents, in 1999. Sales were off slightly, to $395.2 million, compared to $395.3 million in 1999.
Guez said the $2.5 million loss for the year resulted from costs associated with improving computer systems and severance from closures of facilities in Mississippi and Mexico. The company plans to move its accounting and billing departments to its headquarters in Talcala, Mexico, and to eliminate those positions in Los Angeles, Guez said.
Although Briskie predicted the slowing economy would keep sales flat again for fiscal 2001, he anticipates improved profit margins from production efficiencies to result in earnings per share of 50 to 70 cents for the year.