Men's Fashion Week: Is LA Ready? - California Apparel News

For now, Los Angeles–based Speedo
USA is staying in town after the swimwear
brand’s parent company, Warnaco Group
Inc., was acquired by PVH Corp. for $2.9
billion.
Emanuel Chirico, PVH’s chairman and
chief executive, said he was pleasantly surprised
to see how Speedo had grown over the
past few years under the leadership of Jim Gerson,
named president of Speedo USA in 2010.
In an Oct. 31 conference call announcing
the acquisition, Chirico said PVH has no intention
of selling Speedo right now. “When
we started to do the due diligence, we were
pleasantly surprised by the strength of the
Speedo business,” he said. “It is a very marketable
asset. But clearly at this moment in
time, we’re looking for ways to help them
grow that business, invest in that business
and that brand, and take it forward.”
Speedo USA, which licenses the name
from Speedo International Ltd. in England,
has experienced good revenue growth
in the last few years.
In fiscal 2011, Speedo USA saw its
wholesale revenues hit $229.3 million, up
5.4 percent from 2010, when they were
$217.5 million.
The Speedo brand is a dominant label in
competitive swimming, worn by U.S. swimmer
Michael Phelps, who won eight gold
medals in the 2008 Olympic Summer Games
in Beijing and 10 gold medals during the
2012 Olympic Summer Games in London.
In 2011, athletes wearing Speedo products
won two world records at the World
Championships in Shanghai. Some 58 percent
of all medals won at the event were won
by swimmers wearing Speedo suits.
2 CALIFORNIA APPAREL NEWS November 2–8, 2012
Warnaco also makes Calvin Klein swimwear,
in a licensed deal, out of its Los Angeles
office. Calvin Klein swimwear saw its
wholesale revenues climb to $27.8 million in
fiscal 2011, up 18.6 percent from the previous
year, when they were $23.49 million.
Warnaco’s other owned and licensed
brands are Olga, Warner’s and Chaps.
Many analysts and investment bankers
weren’t surprised to see the acquisition. It
had been in the rumor mills for three to four
years. “I think when it happened, it wasn’t a
huge surprise for anyone,” said Paul Zaffaroni,
director of investment banking at Roth
Capital Partners.
Helen McCluskey, president and chief
executive officer of Warnaco, is expected to
join PVH’s board of directors.
Calvin Klein on the move
NEWS SPOt ChECk
Speedo Safe After PVH Acquisition of Warnaco
In his conference call, Chirico said all of
Warnaco’s licensed Calvin Klein businesses,
including the labels for Calvin Klein Jeans
and Calvin Klein underwear, will be moved
to PVH’s purview.
PVH, formerly known as Phillips-Van
Heusen, purchased the Calvin Klein brand
in 2003. The brand is under the leadership of
Tom Murry, president and chief executive of
Calvin Klein.
“This is a unique opportunity to reunite
the ‘House of Calvin Klein’ and reinforce
our strategy to drive the global growth of
Calvin Klein,” Chirico said.
PVH believes that in three years, the
merger will help it save $100 million in operating
costs.
The deal is expected to close in early
2013. Holders of Warnaco common stock
will receive $51.75 in cash and .1822 of a
share of PVH common stock for each share
of Warnaco common stock.
Based on PVH’s last closing stock price,
the per-share value of the consideration to be
received by Warnaco stockholders is $68.43,
a 34 percent premium over Warnaco’s last
per-share closing price.
When the acquisition is completed, Warnaco
stockholders will own about 10 percent
of PVH’s outstanding stock.
PVH’s other brands include Van Heusen,
Tommy Hilfiger, Izod, Arrow, Bass and
G.H. Bass & Co. Its licensed brands include
Geoffrey Beene, Kenneth Cole New York,
Sean Jean and Donald J. Trump Signature
Collection. —Deborah Belgum
U.S. Joins
Mexico on
China Textile-
Subsidy Case
The United States is backing Mexico in
its efforts to challenge alleged subsidies the
Chinese government provides its apparel
and textile factories.
On Oct. 15, Mexico went to the World
Trade Organization to challenge what it
believes are various measures and economic
incentives by China to financially support
apparel and textile manufacturers.
On Oct. 30, the United States decided to
join Mexico in that challenge.
Under WTO auspices, Mexico requested
consultations with China over nearly 100
alleged illegal subsidies that include tax
exemptions, reduction of import duties and
value-added taxes for equipment purchases,
low-cost loans from state-owned banks,
preferential land-use rights, and cash payments
from government agencies.
Mexico believes these alleged subsidies,
prohibited under WTO rules, have hurt its
apparel exports to the United States. Mexico
used to be the No. 2 provider of apparel and
textiles to the United States. It is now No. 4,
with $4.7 billion in apparel and textiles sent
to the United States in 2011. China is No.
1, providing about 40 percent of all apparel
and textiles sold in this country. Last year,
that totaled $40.6 billion.
Under WTO rules, the two sides have 60
days to discuss Mexico’s claims. If a settlement
is not reached, Mexico can ask a WTO
panel to make a ruling.
Cass Johnson, the president of the National
Council of Textile Organizations in
Washington, D.C., praised the decision by
the United States to join the consultations
between Mexico and China.
“For decades, large and comprehensive
subsidies by the Chinese government have
prevented free and fair markets from operating
in world trade in textiles and apparel.
These subsidies have directly contributed to
the loss of hundreds of thousands of U.S.
textile workers,” Johnson said in a statement,
noting that 379,000 U.S. textile jobs
have been lost over the last 11 years as manufacturing
shifted outside the United States.
“The landmark case by the government
of Mexico exposes the Chinese government
intervention for exactly what it is—a mercantilist
state-guided effort to control one of
the world’s largest manufacturing sectors.”
—D.B.
CHOOSE LUXURY: Darrel Adams, owner of Kin
Los Angeles, recast his boutique as a luxury
shop in 2009.
Kin’s Journey to
Luxury Labels
For fashion boutique Kin Los Angeles,
luxury is its key to success.
When it opened in 2004, the boutique,
located at 8555 Sunset Blvd. in West Hollywood,
Calif., was intended to be ultimate
clothier to the nightlife set. The shop would
offer both high-end and low-end fashion.
Club kids could find a $25 shirt alongside a
$1,500 jacket.
But the 3,500-square-foot store, which
is a short walk from the Sunset Plaza retail
district, could not make money on low-cost
items, said Darrel Adams, Kin’s co-founder
and, now, sole owner.
The store was too small to churn out the
large quantity of low-cost clothing required
to make a profit, and Adams had no desire to
compete against the masters of the low-cost
fashion market, such as H&M, which happens
to run a big store down the street from him.
Adams made a gambit to sell only designer
clothing after Kin co-founders Alex Mouracade
and Jacqueline Kanawati left the company
in 2009. The new direction seems to be
paying off. Adams is close to signing a lease
for a new boutique in Los Angeles’ exclusive
Bel-Air neighborhood that will be smaller
than his current boutique.
Adams hopes that all of his stores—the
physical store on Sunset Boulevard, the Bel-
Air store and the online store at www.kinlosangeles.com—are
defined by good service
and a wide range of merchandise for both
men and women.
For women, Kin’s top-selling item is the
reversible jeans by Los Angeles–based label
Bleulab. The jeans retail for $245. The most
popular style is a bronze colored, wax-coated
jean that has the look of leather pants. When
the pant is turned inside out, it becomes an indigo
blue jean. “It’s the anti–walk of shame
jean,” Adams joked, noting that the jean provides
the opportunity for a new look after
leaving a tryst.
Kin opened its men’s section in February.
The top-selling item is the “Drill” chino pant
from Levi’s Made & Crafted label, which
retails for $255. It’s popular because the fabric
is soft and the chino offers a traditional, baggy
fit. It’s an alternative to denim and the skinny
look, which still dominates men’s pants.
—Andrew Asch
INSIDE OUTSIDE: Bleulab’s reversible jeans,
one pair pictured above, are top sellers at Kin.
Image courtesy of BleulaB