NEW YORK — Mondi’s return to retailing in America, with store openings in the King of Prussia Mall in Pennsylvania in November and Palm Desert, Calif., last week, is as much an invitation for investment as it is a showcase for the collection.
This story first appeared in the January 13, 2004 issue of WWD. Subscribe Today.
“Right now, I am seeking investors or a strategic partner to expand Mondi retailing and wholesaling. We need to open quickly, to sustain brand interest,” said Skender U. Perolli, who is president of Mondi Fashion Group and who holds the rights to distribute the Mondi line and to license the brand in the Western Hemisphere.
Allegiance Capital Corp., based in Dallas, is representing Mondi to find an investor. The brand is based in Munich, and is owned by Fehmi Chama, an agent and distributor who has previously worked with Escada, Laurel, Joop and Louis Feraud.
“It’s time for a comeback because Mondi left a gap in the market,” Chama said. “I believe no brand has replaced Mondi. It’s a coordinated, colorful, joyful, affordable and modern collection.”
But restoring Mondi’s place in the market will be “very tough,” he acknowledged. “We’ve been working on it for four years, but the breakthrough is that people still accept it and now shops are being opened again. It’s a risk for me and for Skender, but we are convinced it will work.”
The 1,700-square-foot King of Prussia store is expected to yield $1.2 million in sales in its first year, and $2.5 million in the second, according to Perolli, a former executive at Escada and Merona. The 1,800-square-foot Palm Desert store will be enlarged to 3,100 square feet during the summer.
In addition, a 1,000-square-foot shop will open in the Tropicana hotel-casino in Atlantic City, N.J., this summer, and sites are being considered for Las Vegas, Palm Beach, Fla., Chicago, Boston, Scottsdale, Ariz., and Toronto. An outlet store in Woodbury Common in Harriman, N.Y., is on the drawing boards, and Perolli said that in June he might start looking for a Manhattan location. “We are examining top-performing locations where Mondi used to operate, provided the location won’t conflict with our wholesale business,” he said.
He believes Mondi could roll out 40 stores in three years, provided it gets more backing. The brand had stores in America up until 1999 when the last unit closed in Palm Desert, Calif. That store at its peak did $3.8 million in sales, Perolli said.
At one time, there were a total of 58 full-price units and outlets, but in the late Nineties, the bridge market started to tank and Mondi complicated matters by changing designers and the look of the collection too often and raising prices. Mondi filed Chapter 11 in September 1999, when its parent, Investcorp, gave up funding the money-losing operation and negotiations with banks collapsed. A month later, Chama bought Mondi out of bankruptcy, purchasing the trademark and inventory. A year ago, the Mondi showroom at 530 Seventh Avenue here opened.
Asked what Mondi’s strengths are, Perolli replied, “It’s a lifestyle collection, with eight deliveries. Pieces from the different groups work with each other. What makes Mondi are the details, such as sequins and embroidery, and its classic, tasteful designs. There is a distinctive personality, appealing to mothers and daughters.”
Mondi currently has a $2.5 million wholesale business in the U.S. selling to high-end specialty stores, including Tres Mariposas, in El Paso, Zita in Milwaukee and Naples, Fla., and the Vintage Club in Palm Springs. For spring, jackets are priced to retail for $400 and $500, in leather and linen; pants, $200 to $300, primarily in cotton linen combinations; blouses in silk for $200 to $350; dresses in silk, cotton or linen, up to $500, and knits from $200 to $500. Eveningwear will be available in the Mondi stores next month, ranging from $600 to $2,600.
Outside the U.S., Mondi has about two dozen stores and shop-in-shops, primarily in Europe, but also in the Mideast and Asia. Total sales, retail and wholesale, are about $30 million. Chama said that last year, Mondi was marginally profitable.