RUZOW JOINS KELLWOOD AS WOMEN’S PRESIDENT IN MODERATE EMBRACE

Byline: Kristin Larson

NEW YORK — Stephen L. Ruzow has come full circle.
Saying “designer is not the place to be today,” Ruzow has been named president of women’s wear at Kellwood Co. — roughly five months after stepping down as president of Pegasus Apparel Group, now known as The Leiber Group.
It marks a homecoming of sorts, as Ruzow returns to the moderate market. He was president and chief executive in the early Eighties of The Warnaco Group’s activewear and women’s apparel divisions, and returned to Warnaco for a year in late 1998 overseeing Calvin Klein underwear and accessories.
“It’s all about the product,” said Ruzow, in an exclusive interview Monday morning at Kellwood’s offices here. “Kellwood is the place to be today and I’m very happy to be here.”
Ruzow begins Wednesday, reporting to Hal J. Upbin, chairman, president and chief executive officer.
In this newly created role at Kellwood, he will be charged with managing the $1.6 billion women’s division — which generates 70 percent of the volume of the $2.4 billion company, working with the individual divisional presidents to develop strategic marketing, licensing and branding, and expanding retail relationships, domestically and internationally.
“This gentleman will be at home in the moderate arena with our customer, the way he was throughout his career — I’m very comfortable with that,” Upbin said. “He has an understanding of the business and a respect from retailers that will translate beautifully.”
Kellwood employed the executive search firm Heidrick & Struggles here to assist in the hiring after Upbin performed what he deemed a “quiet search” last year and was unsuccessful. In total, he said he interviewed about 10 candidates.
Upbin said the need to hire a president focusing specifically on the women’s business arose out of the company’s growth. On the men’s side, the firm hired Robert Skinner to lead that division in September 2000.
“At the divisional level we are strong, but at Kellwood, we didn’t have the representation we wanted,” Upbin said. “With the acquisition work, it was just too much. We grew and grew and grew, and now we really needed to augment the corporate staff.”
Ruzow’s appointment will allow Upbin to concentrate on managing the overall organization and various segments of Kellwood, whose top three brands are Sag Harbor, Kathie Lee and Koret.
In its most recent quarter ended July 31, Kellwood’s income was off 72.3 percent, to $1.8 million, compared to $6.6 million in the year-ago quarter. Sales were up 6.7 percent to $501 million from $469.3 million.
“What this will do is free up part of my focus and involvement,” Upbin said. “Part of this is acquisitions, as well as operations. It’s really kind of stepping back and looking operationally at things and not worrying about the front-end of the curtain which has taken a lot of energy, and rightly so….But we’ll be partners so we’ll overlap and work together.” Furthermore, the hiring of Ruzow nearly completes the senior management structure at Kellwood, with the exception of a president and chief operating officer post that will eventually be filled, most likely from within the organization, Upbin said.
Ruzow, 58, adds another chapter to a 40-year career in apparel. Besides his tenure at Leiber and his two stints at Warnaco, he was at Donna Karan International as president and chief operating officer from 1989 to 1997, and Kate Spade, where he was ceo from March through May 1998.
He resigned from the presidency at Leiber in May — a post he held since March 2000, after being active in the formation of the firm. Ruzow was instrumental in the company’s goal of forming an American luxury group, modeled after European luxury conglomerates like Gucci Group, Prada and LVMH Moet Hennessy Louis Vuitton. However, despite the fledgling company’s grand ambitions, it had its share of travails during its first year in business: It fired Pamela Dennis from her own company, canceled Daryl K’s fall production, moved headquarters into Judith Leiber’s offices in attempts to cut corporate costs, and in September, closed down the Miguel Adrover division and announced it was looking for a buyer.
Susan Sokol, who was named ceo in May at the same time the company changed its name, will assume any responsibilities that Ruzow still oversaw as chairman, a spokesman for The Leiber Group said Monday.
On Monday, Ruzow emphasized his enthusiasm for drawing upon his background in the upscale designer world and applying that taste level to the moderate arena.
“There’s so much coming out of Donna Karan, so much product knowledge that really is adaptable to the moderate market,” said Ruzow. “I’m looking at it from a $1,200 cashmere sweater. We don’t do $1,200 cashmere sweaters here, but the look could be similar. There’s a lot to be said about taking a great product and bringing it to the masses, and I’m really going to focus on that — especially with [Kellwood’s plus-sized brand] Emme, the women in America who are in that segment really have not been catered to.”
Targeting mass audiences was not the only attraction Ruzow had for Kellwood, he said.
“The problem I see with all the companies that I worked for over the years has been that their channels of distribution were extremely limited,” Ruzow said. “What attracted me most to Kellwood was that this is a company that’s in every possible channel of distribution, and I don’t think you can survive today if you’re not+.You can’t just be in the department store channel of distribution and survive.”
Noting that Kellwood is only a domestic player at this time, Ruzow said another of his goals will be to investigate international opportunities for the company in addition to increasing the company’s stable of brands.
“When I left Donna, 40 percent of our business was done outside the U.S. and that’s one of the areas of growth,” he added. “Globalization is the buzz word — to compete today in this economy, you’ve got to be a global company.” Upbin said he’s also looking forward to mining Ruzow’s extensive experience in the higher-end arena.
“Steve’s background in better is great, and he’s bringing that expertise to moderate,” Upbin said. “You can translate that knowledge into moderate.”
In light of the sluggish economy and drooping consumer confidence, it is likely the moderate market will face continued challenges down the road.
Even so, Upbin said he thinks there are significant opportunities to develop the company’s stable of brands in the moderate and better markets.
“That’s the real golden opportunity — to have some corporate resources to focus on this,” Upbin said, “whereas the divisional presidents are very focused on the day-to-day. It’s far more difficult for them to step back.”
Specifically, Upbin pointed to the brands David Meister, David Dart, Democracy and the company’s newest label, Emme, as areas for possible additional growth.
And while the majority of Kellwood’s business comes from Sag Harbor, Kathie Lee and Koret, Ruzow said he sees opportunities to grow the smaller divisions that do $100 million to $150 million.
“Those three I mentioned total over $1 billion themselves, but there is another $600 million of women’s business that we are going to focus on with the same intensity,” Ruzow said.
Sourcing will also be a key focus for Ruzow, especially during these economically prudent times, he said, pointing to the potential that exists internationally.
“Any kind of margin improvement that we can realize is going to be critical to growth,” Ruzow said. “We don’t only want to grow the top line, obviously we also want to grow the bottom line. And the only way to grow the bottom line is through gross margin enhancement, and that has to come on the sourcing side because we are a very lean company.”
Upbin concurred, saying that part of the company’s goals are to evaluate its sourcing and eliminate redundancies.
“I have no question Stephen will add tremendous value to that,” Upbin said. “He’ll be a busy man.”