LEIBER CLOSES DOOR ON MIGUEL ADROVER, HANGS ‘FOR SALE’ SIGN
Byline: Eric Wilson
NEW YORK — The clock just struck midnight on fashion’s favorite Cinderella story.
The Leiber Group pulled the plug on the two-year-old Miguel Adrover collection on Thursday, confirming that the business had suspended operation and that it’s looking to sell off the division.
The decision to shut down the Adrover company — one of the six fashion businesses acquired under the original Pegasus Apparel Group umbrella since the conglomerate was formed in March 2000 — was based both on the current economic environment and the change in business strategy that Pegasus undertook this May, when the company was renamed as the Leiber Group and Susan Sokol was tapped as president and chief executive officer.
The quick turn of fortunes for one of fashion’s rising stars is indicative of larger difficulties looming at retail, where many fall orders have been canceled and stores are tightly restricting their spring budgets in response to the struggling economy and an anticipated downturn in consumer confidence following last month’s terrorist attacks.
Adrover’s was seemingly an overnight success story, as the lanky, Majorcan immigre scraped together a break-through collection for fall 2000. He charmed the fashion establishment by making fun of some of its cherished icons, deconstructing Burberry coats, Louis Vuitton handbags and dirty old mattress ticking and turning them into a smart and irreverent take on the status symbols of luxury. He lived hand-to-mouth in a dank East Village apartment, with only a few dollars to his name despite the critical acclaim for his first two collections.
But by April, the designer formed a deal with Pegasus, which had then already taken majority equity stakes in Pamela Dennis’s eveningwear business and the hot sportswear label Daryl K, using capital from a private equity fund. The company set Adrover up with a 5,000-square-foot studio and showroom on Manhattan’s Bowery, lavish runway shows and a staff of about 20 people.
After his first fully financed show, Adrover won the Council of Fashion Designers of America’s award for new women’s wear designer.
In three seasons under the financial partnership with the Leiber Group, Adrover’s business grew to an estimated $5 million at wholesale with Neiman Marcus and Saks Fifth Avenue as its major accounts, according to retail sources.
The company will distribute its resort collection but will not produce the spring 2002 line that was shown here on Sept. 9, and about a dozen employees will be let go as a result of Thursday’s news.
Adrover would not comment on the development, but said in a statement, “My biggest concern at this moment is what’s in the best interests of the greatest team of people I could ever work with. While it’s not an easy time, I look forward to exploring new possibilities.”
The decision to suspend operations under the Leiber Group does not preclude the possibility of licensing the Adrover name to a production partner, much as the company is looking to do with designer Daryl Kerrigan’s Daryl K line, which ceased production this April, although sources indicated that the company will more likely look to sell Adrover’s business. Fueling that speculation was the unexpected attendance of Donna Karan ceo Giuseppe Brusone at his collection, as well as Franco Pene, chairman of Gibo Co. SpA.
While Adrover’s collection continued to develop critical success and impressive retail distribution for a start-up, its complicated and labor-intensive craftsmanship would make for a difficult production license. And, an expensive manufacturing effort cut into the line’s ultimate chances of profitability, which would have more likely been derived through other product licenses in the future.
“The most important factor in making this decision was that we felt now is the time to align ourselves with a strategic partner or buyer that has the right kind of infrastructure to take the Miguel Adrover business to the right level,” Sokol said.
Since the Leiber Group closed the production of Daryl Kerrigan’s collections this year and licensed Pamela Dennis’s business to Kay Unger, as well as broke its ties with accessories designer Angela Amiri, Adrover’s was the only fashion production it still owned. Sokol has emphasized in previous interviews that the Leiber Group had changed its business strategy to focus on acquisitions of companies that have established infrastructures and that are branded, in an effort to avoid the costs of financing fledgling talents.
“Given the economic climate, this is not the time for us to be investing in a business that was a pure start-up,” Sokol said. “We’re very proud of what we built Miguel’s business into, but we believe we need to take a step back. Efficiency and profitability were the key decisions.”
Sokol added that the Adrover label has several assets that might prove to be lucrative for a potential buyer, including the fast development of the designer’s brand into a well-known label with impressive channels of distribution.
“A company with the right infrastructure will see this as an opportunity,” Sokol said. “Within a year’s time, the business grew to a very respectable number.”