Apparel and soft goods maker Kellwood Company today revealed plans to exit its Kellwood Private Label menswear, Intimate Apparel Group and Kellwood New England labels, and revised its second-quarter and full-year financial forecasts.

The clothing company said it was reducing its operating divisions to 11 from 14.

This includes an exit from Kellwood Private Label men's wear (which does not include Smart Shirts), an exit from Kellwood Intimate Apparel Group, which includes the Biflex, LA Intimates and Dotti divisions, an exit from Kellwood New England, which includes David Brooks, Pink Poodle and other smaller volume brands sold through specialty stores.

It said it would also restructure its Oakland Operation by exiting several labels to better focus on developing the Koret brand, and reassess some ongoing business operations.

The company expects the restructuring will cost $155 million, or $5.51 per share, and will lower sales by about $335 million. 

Kellwood says the move is aimed at growing its consumer lifestyle brands and reducing exposure to smaller volume brands and private label businesses.

Kellwood'' president and chief executive officer, Robert Skinner Jr, said: "We expect that these actions will allow us to better focus our resources to further build our existing portfolio of lifestyle brands and effectively pursue additional growth opportunities in the marketplace.

"This strategy, along with actions taken to upgrade our talent base, reduce cycle times and improve our assortments should result in better operating performance beginning in fiscal 2006."
Kellwood says it is hopeful the plan can be completed over the next 12 months.

Separately, the company said it is reducing its earnings outlook for the second quarter and 2005 year. For the second quarter, the company expects net earnings of around $0.6m compared to the company's previous guidance for net earnings in the range of $10.5million.

For the fiscal 2005 year, the company expects net earnings in the range of $37m to $38m, compared to previous guidance of $68.5m.

Skinner commented: "While sales for the second quarter are expected to be in line with our expectations, second-quarter earnings are now expected to be negatively impacted by higher than anticipated markdowns on spring and summer merchandise in certain women's sportswear divisions and lower margins in men's sportswear."