Blog: Leonie BarrieKellwood more agile after reorganisation

Leonie Barrie | 7 September 2007

As Kellwood Inc plunged into the red yesterday, investors and industry observers can take some consolation from the fact the apparel maker is trying to untangle itself from the changing face of retail, which is at the root cause of its problems.

The company, which is behind such diverse labels as Sag Harbor, Gerber Childrenswear, XOXO and Phat Farm, swung to a second quarter loss of $65.8m as sales were stifled by poor demand for some of its private label women’s wear brands.

It now plans to trim down its women's sportswear business from seven to three operating divisions – ‘Lifestyle Alliance,’ ‘Designer Alliance’ and ‘Modern Alliance’ – focusing on its moderate brands, better and above price point brands, and the juniors business respectively.

The shake-up is intended to create a more agile organisation that can adapt to changes in its brand or customer portfolio, improve speed to market, and reduce costs through efficiencies in scale.

Kellwood has in the past attempted to maximise growth by acquiring as many brands as possible to guard against fashion cycles or over exposing itself to any one brand or channel. But department store consolidation has hit hard, leaving fewer takers for its brands and order cut backs on its poorer performing apparel lines.

Steps already taken to meet new demand from department stores for private label, or exclusive, brands include the launch of O Oscar, an Oscar de la Renta company, exclusively at Macy's.

And in recent months Kellwood has acquired the Vince, Hollywould and Hanna Andersson brands to shore up its higher profile, higher-priced apparel offer.

Like its rivals VF Corp and Liz Claiborne, Kellwood is now trying to reinvigorate its core business by pegging its hopes on what it sees as hot brands with big growth potential. But it is likely to feel continued pressure to perform, at least for the foreseeable future.

Kellwood trims women's sportswear unit


BLOG

Act now to keep receiving just-style newsletters

You may have noticed a red alert bar at the top of just-style’s weekly and daily newsletters asking you to “Act now to keep receiving the just-style newsletter.” ...

BLOG

Apparel imports into the US rose in June

Apparel imports into the US rose in June as merchants stocked up for summer and prepared for the back-to-school season, with imports from Vietnam continuing to surge....

BLOG

US retailers under pressure to grow sales as mall traffic slows

Under Armour is to close stores and cut jobs – around 2% of the company's global workforce – as part of new plans to build a stronger and smarter company with faster go-to-market speed and greater dig...

BLOG

Agile logistics key to new hybrid retail world

US retail giant Walmart has topped a list of the fastest growing retailers thanks to its investment in ensuring it has the right balance between its online and brick and mortar operations....

just-style homepage



Forgot your password?