DENNIS HIRES BIG GUN FOR PEGASUS DEALINGS

Byline: Eric Wilson

NEW YORK — Reports of a mounting rift between eveningwear designer Pamela Dennis and her backers at Pegasus Apparel Group intensified on Monday as she acknowledged for the first time that she had retained high-powered attorney Stanley S. Arkin to represent her in negotiations over her future role with the company, which is in some doubt.
Also on Monday, one of Dennis’s major fabric suppliers charged that Pegasus is in arrears of $115,000 owed for sample and production costs related to Dennis’s recent collections.
Dennis would not comment on the nature of her legal discussions with Pegasus, directing inquiries instead to Rubenstein Associates, the public relations giant that specializes in crisis management and financial relations. A spokeswoman for the designer would only confirm that Arkin, a well-known New York litigator of Arkin Kaplan & Cohen, “is representing Pamela Dennis and is involved in negotiations on her behalf.”
Up until now, executives at Pegasus have played down persistent rumors of troubles with its relationship with Dennis, the first designer brand the company acquired last year as it set out to form a conglomerate of fashion businesses. But the involvement of Rubenstein and Arkin — who has represented several high-profile clients in stickier situations, from Bryant Gumbel in his marital discord to the Liggett Group in its involvement in the government’s criminal investigation of the tobacco industry — has brought about further speculation as to what’s going on between the two parties.
Some insiders have claimed that Dennis is looking to get out of her contract with Pegasus and to get the rights to her name back from the group, which bought a majority interest and control of the Pamela Dennis label in March 2000. When Pegasus announced this year that it would be turning its attentions to the production of a Pamela Dennis evening collection for the lower-priced market in a joint venture with Kay Unger, the designer was said by sources to be furious with the company for turning its attention away from her runway collection, which features expensive gowns aimed at the upper end of the luxury market — a narrow and more difficult business.
In March, Pegasus said Dennis had reached a deal to spin off her signature collection by setting up a company on her own and licensing her name back, although the involvement of an attorney would lend some doubt to whether that presented a viable solution to the conflict between Pamela Dennis, the designer, and Pamela Dennis, the company.
Arkin, reached by phone, would not comment on the nature of his dealings with Pegasus, but a spokesman for the conglomerate, which also counts Miguel Adrover, Daryl K and Judith Leiber among its holdings, denied that the discussions had turned toward ownership of the Dennis label. Pegasus acquired the label from Cheil Industries, a subsidiary of Samsung Group of South Korea, which had backed her for three years.
Dennis has previously quarreled with backers, and in the case of Cheil, resigned from her own company after complaints that the company would not support the line with marketing and advertising budgets.
“We know of no dispute with respect to the ownership of the name,” the Pegasus spokesman said. “Ms. Dennis sold her name to a prior owner, from whom we purchased it with her knowledge.
“Ms. Dennis’s future involvement regarding the Pamela Dennis evening collection is a matter under discussion between her and the company,” he added, referring to the collection under development with Kay Unger that is planned for a resort launch at retail.
Also complicating matters are rumors that some modeling agencies and suppliers had not been paid for services to the designer collection, which sources indicated is not currently in production.
Francois Damide, president of Solstiss/Bucol USA, a luxury fabric and lace supplier, said he is owed $115,000 by Pegasus for product supplied for Dennis’s fall 2000 and spring 2001 collections. After failing to secure payment from Pegasus, he turned the matter over to a collection agency, he said.
“How they handled the account and treated me was definitely poor,” Damide said. “I did everything I was supposed to do. I shipped on time, sometimes paying overnight because it was important to meet deadlines. I have to do something now.”
Damide said he had phone conversations with Mary Ann Domuracki, who joined Pegasus as chief financial officer in October, but could not reach an agreement on payment.
The Pegasus spokesman would only respond that the company is in the process of working out payment arrangements with Solstiss.