Warehousing: Designs Inc.’s New Focus
Designs Inc., which operates outlet stores selling Levi Strauss & Co. merchandise, has a new leader and a new direction.
As reported, last week the Needham, Mass., company, which has lost money the last two years, named David Levin president and chief executive officer. In an interview his second day on the job, Levin, whose resume includes stints at Revlon and Prime Retail, said his initial focus at the company would be improving its warehousing operations.
“The company has not relied on systems that are really required. A size-intensive business needs to be managed at the [stockkeeping unit] level,” he said of the 103-store chain’s assortment. “We really need to upgrade the warehouse situation, distribution to the stores. That’s going to have tremendous benefit.”
Designs Inc. currently has “minimal” warehousing. Most merchandise is shipped directly to its stores, according to Levin. He said the company was currently “negotiating some warehousing” that will allow it to better track and allocate its merchandise.
“This is a company that has lost significant sales per store in the last few years,” he said. “To me, it’s a matter of getting the right product in the right stores.”
Once inventory management is under control, he continued, Designs Inc. plans to focus on sales growth.
“We’re going to be on the most aggressive growth in stores that we’ve had in several years,” he said. “We have a very strong portfolio, but our long-term goal is to look for opportunities to significantly grow our business.”
In a separate interview, Jack Schultz, who had been president and ceo on an interim basis and remains on the company’s board, hinted that Designs Inc. was also considering its options outside the brick-and-mortar world.
In explaining why the company chose Levin, he cited his prior experience running outlet stores, his real estate background and his experience in e-commerce — at Prime Retail, Levin had worked on developing an e-commerce project.
Last week, two days after Levin joined Designs Inc., Prime Retail scotched that project, which was to have been called eOutlets. The company said the decision was prompted by an inability to transfer ownership of the venture to a group of investors, including eOutlets management.
Asked if Designs Inc. was looking to develop an e-commerce strategy, Schultz responded, “It’s obviously something that we are looking at, but we have made no moves in that direction. Obviously, it’s an important, growing form of retailing. But our specialty is the outlet business.”
Todd Oldham: Carnival Barker
Todd Oldham’s talents are by no means limited to designing clothes. In the last year, he’s moonlighted as a photographer for US Weekly. And late this month, he’ll pull a stint as a carny.
On April 30, Oldham will man a booth at The Elizabeth Glaser Pediatric AIDS Foundation’s annual Kids for Kids event. According to Lauran Huff, special events coordinator for the foundation, it hasn’t been determined whether he’ll be at the ring-toss booth, the basketball shoot or one of the other games. But Oldham’s experienced in this racket — it will be his sixth appearance.
The seventh edition of the event is to be held at Industria Superstudio in New York’s West Village. Organizers hope to raise $2 million, surpassing last year’s $1.6 million.
Other fashion-industry celebrities expected to participate in the event are Nicole Miller, Kenneth Cole, Cynthia Rowley, Shoshanna Lonstein, Betsey Johnson and Zang Toi. Donna Karan is a co-chair, and more than 100 celebrities are to participate in the event.
Tyrese Wows ‘Em at Bloomingdale’s
Tyrese, Guess’s new face, showed up at Bloomingdale’s Manhattan flagship last week, and the scream machine went into high gear.
“Are you all feeling the Guess and Tyrese connection?” the R&B artist and model shouted to the screaming crowd of 500 people, who were kept at bay behind a roped area. Tyrese, dressed in Guess black jeans and a black sleeveless shirt, made the crowd swoon with his songs “Sweet Lady” and “Lately” from his platinum self-titled debut album. Then he signed autographs.
“I’m always late for school because I watch him on the ‘MTV Jams,”‘ said Natalie Ortega, an 18-year-old student, who was trying to maintain her composure after the singer called her on stage.
“He sounds just like the record,” said William Barnes, 34, who was in line waiting to get Tyrese’s autograph.
This is the fifth in-store appearance Tyrese has made since signing with Guess last October. He is set to make in-store appearances in San Francisco, Chicago, Philadelphia, Atlanta, Miami and Boston in the next couple of months, according to a Guess spokeswoman.
Guess is scheduled today to outfit Tyrese in the company’s specially made designs for his upcoming album, “2000 Watts,” to be released in September.
Following his performance at Bloomingdale’s, the R&B artist said he had been a loyal fan of Guess before signing on as a spokesman. The partnership, he said, should help his image.
“A lot of people sent me clothes,” he said, “but Guess seemed to embrace all of me.”
At Guess, It’s Bonus Time Again
After a two-year dry spell, the top executives at Guess Inc. were again awarded bonuses last year.
The Marciano brothers, who run the Los Angeles-based company, were the biggest winners, taking home bonuses equal to their salaries, according to the company’s recently filed proxy statement.
Maurice, co-chairman and co-chief executive officer, was awarded a $900,000 bonus, upping his total compensation to $1,921,070, which also includes $121,070 in other annual compensation for costs including transportation. That was up 82.9 percent from the $1,050,589 he was paid last year.
Paul, co-chairman, co-ceo and president, inched out Maurice on the pay front. He was also awarded a $900,000 bonus, bringing his total compensation to $1,948,721, which includes $148,721 in other compensation. That was up 85.9 percent from $1,048,507 from last year.
Armand, senior executive vice president, received a $650,00 bonus, bringing his total compensation to $1,353,729. That includes $53,729 in other compensation. His pay is up 88.3 percent from $718,791 last year.
The awards came in what was a banner year for the company. In 1999 Guess’s net earnings more than doubled, to $51.9 million, compared with $25.1 million the prior year. Net revenues were up 27.1 percent, to $599.7 million from $471.9 million.
The rewards could be even sweeter this year, if the company can keep its momentum. If shareholders approve the company’s proposed 2000 bonus plan at its annual meeting next month in Marina Del Rey, Calif., Maurice and Paul Marciano’s target bonuses will be set at $1,350,000, and Armand Marciano’s at $975,000.