MARISA CHRISTINA SELLS FLAPDOODLES
NEW YORK — Marisa Christina Inc. has sold its Flapdoodles children’s division in a $4.7 million cash-and-stock deal, but the company cautioned that charges related to the sale and a poor retail performance have created substantial fourth-quarter losses.
Acquired in 1993, the Flapdoodles business is now in the hands of a newly formed corporation owned by Marc Ham, former president of the division, and Carole Bieber, former executive vice president and design director. Ham has resigned his positions as vice chairman and board member of Marisa Christina.
While the sale centers Marisa Christina’s business on women’s apparel, the company will feel the sting of an $8 million related charge in its fourth quarter ended Dec. 31. Write-off of goodwill accounts for $5.8 million of the charge.
Michael Lerner, chairman of Marisa Christina, said in a statement: “The one-time Flapdoodles charge, as well as other negative factors, including a lackluster retail performance, will cause us to have a significant loss in the fourth quarter of 2000, instead of the flat earnings that we had originally expected.”
Lerner reiterated the company’s 2001 earnings estimates of 50 to 70 cents a share.
He also noted that the sale will “enable us at Marisa Christina to devote our energies to our women’s business, which has been steadily improving in the past six months, and at the same time be able to look at new opportunities and alliances.”
The New York-based knitwear firm is in the midst of a brand-building campaign which includes the recent launch of its Web site, marisachristina.com, and advertising in magazines such as Women’s Day and McCall’s.