CONSIDERING CONSOLIDATION

Byline: Rosemary Feitelberg

NEW YORK — The hosiery business has long been a volatile market — and the business has only gotten bumpier of late — but legwear makers said they’re ready for the ride.
Despite major consolidation plans announced by Ridgeview Inc. and Jockey International last week, legwear makers aren’t shaken. In fact, most said the shakeout is long overdue given the tough sheers business in recent years.
Ridgeview announced Thursday its intention to sell the company, just a few days after revealing plans to get out of the branded sheer hosiery business.
Meanwhile, Jockey International said it will license its sheers to legwear giant Sara Lee Corp. this fall, and on Friday, Vision Legwear, a Spruce Pine, N.C.-based manufacturer, said it had signed a deal with Jockey to purchase its private label hosiery business called Thorobred.
Ridgeview’s decision resulted in 50 job cuts and Jockey’s move will put 300 employees out-of-work.
While legwear executives said the job losses were regrettable, they agreed for the most part that the downturn in the sheer hosiery business has taken its toll on manufacturers that have not branched out into other categories, they said.
“The market definitely needs to consolidate. There are too many vendors trying to sell too many retailers,” said Barbara Russillo, president of DML Marketing, the maker of Legale legwear. “In the casual hosiery business, the top four resources in department stores are the same across the board. There are 30 to 40 vendors trying to sell one small hosiery department.
Jordan Lipson, president and chief executive officer of American Essentials, offered a different take.
“I don’t think we’ve touched the tip of the iceberg with consolidation. As the retail market continues to consolidate, there are a lot of synergies, joint ventures and alliances to be formed,” he said. “It’s a national phenomenon. Why wouldn’t it happen in our industry to? As the market becomes more global, we’ll see more of it.”
Lipson praised Jockey for its decision to get out of the hosiery business to focus on underwear, its core business.
Sid Smith, president and chief executive officer of The Hosiery Association, disagreed.
“Is there more consolidation to come? Most of us feel that the hosiery industry has bottomed out,” he said. “We’re seeing sheers being shown on designers’ runways. We’re beginning to see dressing up returning. It’s not the reversal of casual, but people are dressing up again.”
Manufacturers are also working to develop stylish, innovative products, which are gaining “good market acceptance,” Smith said.
“There are some bright spots,” he said. “We’re seeing shipments and replacement orders we haven’t seen in a few years.”
Arthur Lavitt, president and chief executive officer of Paul Lavitt Mills, noted that Hosiery Sales, Belmont Hosiery, Renfro and Candor have recently been affected by consolidation. Paul Lavitt Mills, the maker of licensed Nicole Miller and Anne Klein legwear, was interested in another hosiery firm, but that deal feel through, Lavitt said.
“Do I like that people are out of work? Absolutely not,” he said. “But all this consolidation presents an opportunity to expand our business and to pick up market share.”
Wayne Lederman, president of Leg Resource, said he expects last week’s announcements to make retailers more cautious.
“Stores will be less likely to put all their eggs in one basket,” Lederman said. “Imagine being a retailer with programs planned [with one of these vendors] and having to scramble to make up for that product?”
He noted that manufacturers that have focused on sheers have been hardest hit by the fallout in the legwear market.
Given that sales of sheers in department stores declined by about 6 percent, it’s not surprising that Ridgeview is getting out of the branded business, said Frank Oswald, a veteran marketing consultant with DuPont.
“From Ridgeview’s standpoint, they’ve done the right thing. I am certain those licenses will be picked up,” he said. “Ridgeview’s concentrating on the mass market is a logical step. If there’s a place to really focus in this business, it’s the mass market.”
Oswald also said Jockey’s licensing deal was a wise move.
“If there’s a hosiery maker that can do something with Jockey, it’s Sara Lee,” he said.
Regina Littles, national sales manager for Gerbe, a French brand that is being rolled out in the U.S., said that Sara Lee’s new licensing deal with give the company greater buying power with department stores. That should help the company’s Hanes Hosiery and licensed Donna Karan business, she added.
Ernst Lange, president of L’s Wear, the U.S. distributor of Kunert legwear, noted that consolidation has been under way in Europe for several seasons. Kunert, a $230 million company, is working to streamline production and distribution facilities for its four other companies. In addition to its signature brand, Kunert produces Hudson, a junior-oriented brand; Burlington women’s and men’s sportswear in Europe and Asia; Silkona mass market legwear, and Legwear Concepts, private label hosiery.
“Everyone is waiting for the turnaround point,” Lange said. “They’ve lost a lot of sales due to the downturn in sheers.”
“It’s always bad when people go out of business,” said Tony Taylor, creative director of Look From London. “But it’s not like suddenly the world decided nylon is unsafe. They’re just getting out of the business because the sheer business has been on a downturn for several seasons.”
Last week’s rumblings in the sheer market should not largely affect Look From London, which specializes in fashion-forward legwear, he said.
“If anything, there will be more stores asking me to do sheers, which we already do,” Taylor added.
John Flynn, vice president of sales and marketing for Levante USA, was unfazed by last week’s changes.
“I don’t see any major changes with the big people. The market is still very strong and we still have opportunities,” he said. “l don’t think it’s necessarily a fashion trend as it is the natural order of things. At some point in time, middle-tier companies go and some other companies take their place.”
Flynn said he met last week with Saks, which is looking for replacement resources for Ellen Tracy, previously part of Ridgeview’s branded hosiery business.
The popularity of bare legs reminded Flynn of the Sixties, when some people thought bra makers would go out of business since many women weren’t wearing bras. The fact that closed-toe shoes are a key fall trend should help the legwear business, he added.

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