Executives from knitwear stalwart Three Dots and Canadian textile and apparel manufacturer Majestic Mills have launched a contemporary knits label, twen-tee, which marries plush proprietary fabrics with retail prices averaging $80.

This story first appeared in the April 8, 2009 issue of WWD. Subscribe Today.

“It’s not business as usual,” said David Lazar, an alumnus of Searle and Express who left his position as executive vice president at Three Dots last July to introduce twen-tee for the current spring season. “There’s no space, and the customer has no appetite. She’s already full. She wants the next thing.”

Lazar is partners with Brian Cytrynbaum, a principal in Montreal-based Majestic Mills, which finances California-based twen-tee through its private equity arm. After spinning and knitting the yarn procured through European mills, Majestic Mills dyes, cuts and sews the products at its factory in Canada, where it can import some materials from Europe without paying duty.

With sales last year totaling 170 million euros, or $250.1 million at the average exchange rate, Majestic also holds stakes in 18 other apparel brands, including Earnest Sewn and K-Way.

Although Lazar declined to forecast twen-tee’s first-year sales, he said the company shipped more than $500,000 worth of product in its first month to 100 retailers, including Intermix, Holt Renfrew, Nordstrom, Henri Bendel and Fred Segal Couture. Twen-tee will begin distribution in Germany, Switzerland and Austria this fall.

“We took everything we knew from the scalability and knowledge of what has retailed and not retailed in garment-dyed T-shirts,” Lazar said. “We leveraged that for the premium contemporary market.”

Like many apparel categories, the T-shirt market faces challenges in a worsening economy. While labels such as Mblem by Mandy Moore are closing, newcomers, including T by Alexander Wang, attempt to secure a foothold in a market dominated by brands ranging from American Apparel and Michael Stars to Splendid and Three Dots.

Responding to the cut-and-sew knit market’s saturation, the established brands have branched into new categories, such as button-down woven shirts at American Apparel and cashmere sweaters at Michael Stars. Three Dots recently hired Los Angeles designer Pegah Anvarian to help transition the knits brand into contemporary sportswear with the addition of jackets and capes cut in novel fabrics such as a stretchy tweed.

Cytrynbaum said twen-tee, which has a U.S. office in Newport Beach, Calif., can find a niche targeting customers who like to shop designer labels but also mind their budgets.

“Twen-tee is more like Rick Owens at half the price,” Cytrynbaum said. “It’s more designeresque. It’s much finer yarn that anyone else can spin for those different brands.”

Twen-tee’s yarns range from a Supima cotton-cashmere blend in rib and jersey to a viscose-Lycra jersey to linen jersey and Supima cotton mixed with milk extract.

So far, its standout offering has been the Supima cotton-cashmere blend, which is knitted into a soft, sheer cloth barely felt on the skin. Dyed light gray, the fabric drapes the shoulders as an open cardigan with an asymmetrical hem. Retailing for $98, the cardigan is one of twen-tee’s priciest items. Other items made of the same yarn include a $70 fitted tank in carnation pink and a $98 double-layer long-sleeve T that is gray on the bottom and black on top.

For fall, twen-tee will introduce its first bottom — a legging knit from high-twist nylon Lycra.