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Avondale $5.4M in Red

Denim and twill mill Avondale Inc. blamed intense competition from foreign-made garments and high cotton prices for its $5.4 million third-quarter loss. The loss compared with a $10,000 deficit a year earlier.

Sales slipped 0.7 percent, to $151.3 million, in the quarter ended May 28.

The Monroe, Ga.-based firm noted in a filing with the Securities and Exchange Commission that fabric sales declined in the quarter “as imported apparel continued to capture market share of domestic retail sales and weak employment and economic conditions within the U.S. impacted consumer demand.”

The profit margin was also hurt by $2.3 million in restructuring charges related to the May decision to shut a North Carolina yarn-spinning plant and to cease weaving undyed fabric at a Georgia facility.

At the apparel-fabrics unit, operating profit dropped to $1.8 million from $9.9 million, while sales slipped 5.6 percent to $112.6 million. The firm’s yarn operation reported an operating profit of $301,000 — even with last year’s level — on a 12.5 percent rise in sales to $47.7 million.

Other operations — including a trucking operation — produced $1.4 million in operating profit, a 13.9 percent decline, on $16.2 million in revenues, off 4.8 percent.

Divisional revenues add to more than total corporate revenues because of intra-company sales; for instance, the yarn division sells to the fabric division.

For the first nine months of the fiscal year, the firm posted a $14.4 million net loss, which compared with a $1.1 million net profit a year earlier. Sales were $412.3 million, down 10.5 percent.

The privately owned mill reports its financial results to the SEC because of public debt. — Scott Malone

ITS Names Winners

The International Talent Support program, a European contest for young designers sponsored by jeans company Diesel and fiber brand Ingeo, recently named this year’s winners.

The event is intended to provide both financial support and publicity for fashion-design students. The top award, collection of the year, went to Demna Gvasella from Georgia. He showed contemporary, layered men’s wear at the July 17 ITS#Three contest in Trieste, Italy. The top prize is 13,000 euros, worth $15,660 at current exchange rates.

This story first appeared in the July 29, 2004 issue of WWD. Subscribe Today.

American Steven Hoffman won second prize — 5,000 euros or $6,023 — for his slim, Fifties-inspired women’s wear. Third prize — 2,500 euros, about $3,011 — went to Japan’s Takashi Sugioka, who showed women’s street-inspired clothes.

Japan’s Yoshikazu Yamagata won Ingeo’s Sustainability Award and 5,000 euros for his avant-garde clothes, which told the story of eight people in a village.

Diesel honored Lesley Mobo of the Philippines with its Diesel Award, which includes funding for the production of a five-piece minicollection that will be sold in select Diesel stores.

Iris Eibelwimmer of Austria and Peter Pilotto of Belgium won the Maria Luisa Award, which offers a chance to display their wares in the window of the Maria Luisa boutique in Paris. — S.M.

FRX Hits Tokyo

New York-based FRX Clothing is entering the Japanese market for premium jeans in September with a focus on the women’s market through Sojitz Corp., a major trading firm formed by the merger in April of Nichimen Co. and Nissho Iwai Corp.

Sojitz said it has reached an agreement for the exclusive import and distribution of FRX jeans in Japan. The line, which includes jackets, will be sold through major department and specialty stores, the company said.

The Japanese jeans market, mostly focused on women in their 20s and 30s, has seen steady growth, Sojitz said.

After a splash of new names hitting the market in recent years, the company said Japanese women now are looking at more distinctive, higher-quality products.

The FRX brand has been gaining popularity in the U.S. since it was introduced two years ago. It will retail in the price range of 18,000 yen to 32,000 yen, or $165 to $294 at current exchange rates, with wholesale prices about half that. — Tsukasa Furukawa

Third Time’s the Charm

Landlubber Jeans, which sailed through a wave of popularity in the Seventies and planned to relaunch in 2002 — only to bag the voyage at the last minute — has returned to the denim scene.

The brand started shipping another edition of revamped products carrying superpremium prices last month.

Steven Rosen, a longtime fabric executive who bought the dormant Landlubber brand in 2001, said the renaissance of demand for high-end denim over the past two years makes the timing right for the line’s return.

“First of all, the economy is much better” than it was in 2002, when he initially planned to relaunch the brand, he said. “We decided to go after the better market, instead of the midtier…now men and women are accustomed to paying these prices.”

For this go-round, Landlubber jeans, which are produced in Los Angeles of U.S-made denim, will carry wholesale prices ranging from $68 to $82, targeting retail prices of $155 to $185. That compares with wholesale prices of $40 to $55 in the label’s previous incarnation.

The collection includes six styles of jeans, mostly with flared and boot-cut legs, with rises of about 6 3/4 inches. They come in four denim washes, as well as cotton twill and corduroy. In addition, the line includes knit tops printed with vintage advertising images from the brand, including one showing a nude hitchhiker.

While the original Landlubber line was unisex, Rosen said in the coming weeks he’ll be introducing men’s styles, which will be similar to the women’s looks but with changes at the fly and seat. He said he expects the relaunched line to generate in excess of $8 million in revenue in its first year. — S.M.

ABS’ Jeans Push

A-Denim by Allen Schwartz, the first offspring of new business partners Allen Schwartz and Armand Marciano, is set to launch next week at the Intermezzo trade show in New York.

The line, which will wholesale jeans for $69 to $98, is a pared-down version of the heavily embellished Allen B. by Allen Schwartz denim line and is targeting the core denim market.

Pared down doesn’t mean plain, however: Extras in the line include tricked-out hardware, detailed waistband, colored washes and multicolored thread and trim. 

“Think Crayola,” said Schwartz, referring to the well-known brand of crayons. “I’m bringing color.”

While 80 percent of the line will be denim, it also includes corduroy and coordinating separates like denim jackets, blazers, T-shirts and ponchos and shirts with a bohemian flavor.

The new division of ABS is on track to do between $8 million and $12 million in sales its first year, said Schwartz, who became an equal business partner with Marciano when they bought the company back from Warnaco Group Inc. for $15 million in cash and $2 million in assumed liabilities in January.

“One of the most exciting reasons to buy the company back was to go after the denim world,” Schwartz said. “This is a world that I always wanted to trade in. We always had the talent but we didn’t have the managerial and manufacturing side…but Armand spent his whole life doing that.” 

Marciano, who founded Guess with his brothers George, Maurice and Paul in 1981, retired from his position as senior vice president in 2003.

“Personally, I think we’re going to bring something that’s different than what everybody has on the market,” said Marciano. “It’s not the basic five-pocket denim.” 

ABS plans to sell the line to select department and specialty stores.

Marciano said, “It’s not going to be a huge line, but [Schwartz] brings a lot of twists…I am very happy to be associated with him.” — Michelle Dalton Tyree

It Eyes Specialty Stores

Los Angeles-based It Jeans is seeking to boost its presence in the specialty store and kids’ market. This month, the company added three people to its sales staff, charged with building the brand’s presence in those markets.

Tammy Brown was named sales manager for young contemporary specialty stores and kids’ products. Previously, Julie Divine had handled those markets. Divine will continue as sales manager for major department stores and foreign retailers. Brown last worked at Lucky Brand Dungarees.

The firm tapped Nicole Bunch as West Coast account executive. She also comes from Lucky. Elisabeth Vazquez has been hired as East Coast account executive. Previously, she worked at Polo Jeans Co. — S.M.

Indigo’s Way to San Jose

Indigo Palms, the jeans spin-off launched by Tommy Bahama last year, plans to open its second store on Aug. 12 in the Santana Row shopping center in San Jose, Calif.

“The great mix of retail and restaurant tenants in a lifestyle setting made it an easy choice to open our second Indigo Palms store,” said George Santacroce, president of Tommy Bahama retail.

The 2,300-square-foot shop will house the men’s and women’s Indigo Palms lines, as well as Indigo Soft, a casual sportswear collection for men.

The store’s design will match that of the first Indigo Palms store, which is in Fashion Island in Newport Beach, Calif. The interior showcases the denim and sportswear against bright cream walls with rich mahogany trim, large black-and-white photographs and custom-made rugs. — Julee Greenberg