MAIDENFORM SAYS IT’S IN TALKS ABOUT ACQUISITION BY KELLWOOD
Byline: Karyn Monget
NEW YORK — Maidenform Worldwide is in talks with Kellwood Co. about a potential acquisition.
Maurice Reznik, president of Maidenform, told WWD Wednesday that the bra maker is currently in discussions with Kellwood, and said: “There’s nothing imminent yet that I can tell you. But it would be a good fit, because [Kellwood] has such a strong private label business, and we have such a strong branded business. And Kellwood produces at such low costs.”
Reznik wouldn’t elaborate other than to say Maidenform is in talks with “other companies.” He would not comment on Maidenform’s financial status.
A Kellwood spokeswoman said the company “never comments on any acquisition until they’ve been completed.”
Another suitor — VF Corp. — which has reportedly been wooing Maidenform in an on-again, off-again fashion since 1997, when it signed a letter of intent to buy Maidenform — reportedly hasn’t extinguished the flame. The 1997 deal was aborted by both firms within a two-month time frame. Sources noted that the crux of the problem reportedly was a pension plan payoff of $8 million for Maidenform veterans, which both companies contested.
A spokeswoman for VF said Wednesday that she “could not comment In November, Eric Wiseman, VF’s new vice president and chairman of intimate apparel, when asked about reestablishing talks with Maidenform, said: “We are always interested in acquisitions in our core growth areas — intimate apparel, jeanswear and day packs.”
Industry observers said that a Maidenform union with an apparel giant such as Kellwood or VF would inject much-needed capital into Maidenform’s production, distribution and marketing. It also would absorb the highly coveted Maidenform brand, as well as a strongly recognized shapewear brand, Flexees, and a well-known full-figure bra label, Lilyette, into a corporate brand portfolio with a global agenda.
The 78-year-old Maidenform — known as the grande dame of the foundations industry, particularly for its branded Maidenform bra label — emerged from Chapter 11 in July 1999, obtaining $60 million in asset-based financing from GE Capital. But the past year hadn’t been an easy one, though the company, which filed for bankruptcy protection in July 1997, generated sales of about $250 million in 2000, reflecting an 11 percent increase over 1999.
In its heyday in the early Nineties, Maidenform — formerly headed by three generations of the Coleman family — was the largest independent manufacturer of bras in the U.S., generating wholesale revenues slightly over $400 million. The Maidenform name is regarded by a majority of marketers as a household name, in the same league as Ford, Coca-Cola, Campbell’s or Nike.
Maidenform’s financial hardships began after its acquisition of 92 percent of NCC Industries, a specialist of full-figure Lilyette bras. Maidenform — to the dismay of industry pundits — sold a 28 percent stake of its common stock to German-based Triumph International, NCC’s major shareholder and Europe’s biggest innerwear maker with annual sales in excess of $2.5 billion.
Triumph never bailed out the beleaguered Maidenform, which was later squeezed by huge overhead costs in a shrinking market and forced into bankruptcy.
Kellwood, under the aegis of president, chairman and ceo Hal Upbin, has been on an acquisitions frenzy for a year. On the intimate apparel front, the company in October acquired Romance du Jour, an 11-year-old sleepwear firm based in Los Angeles.
Last fall, Upbin noted that intimate apparel represents one of four “major platforms for growth.” He added that Romance du Jour will complement Kellwood’s current sleepwear offerings under the L.A. Intimates division, which represents combined total sales of about $70 million. Upbin said overall intimates volume could hit $120 million by 2003.
Kellwood acquired Biflex International Inc. in January 2000, an independent $100 million manufacturer of women’s private label foundations. Biflex is a major producer of private label bras for Federated Department Stores, including Macy’s East and West.