Kellwood reshuffles Oakland Operation to focus on developing Koret brand
28 Jul '05
6 min read
A premier branded apparel and related soft goods marketer Kellwood Company announced several initiatives aimed at advancing the Company's corporate objectives, which focus on increasing its penetration of consumer lifestyle brands with strong growth and profit potential while reducing exposure to smaller volume brands and private label businesses. The Company expects to improve its operating margin upon completion of the following plan:
- Exit Kellwood Private Label menswear, which does not include the Company's Smart Shirts subsidiary;
- Exit Kellwood Intimate Apparel Group, which includes the Biflex, LA Intimates and Dotti divisions;
- Exit Kellwood New England, which includes David Brooks, Pink Poodle and other smaller volume brands sold through specialty stores;
- Restructure Kellwood's Oakland Operation by exiting several labels to better focus on developing the Koret brand; and
- Reassess certain ongoing business operations for the appropriateness of the Company's operational and support infrastructures and also perform a formal review of its assumptions regarding the future profitability of certain brands, labels and divisions.
The Company is in the process of reviewing its alternatives for each of the businesses it will exit and will consider the sale of all or some of these divisions and brands.
The annual sales and pre tax operating loss associated with divisions and brands slated for exit are expected to approximate $335 million and $8.3 million before tax, respectively in fiscal 2005. The after tax loss is estimated to be $5.6 million, or ($0.20) per diluted share.
marketing@alchempro.com
