Seven Expansion to Add Up to More Money

After settling a bitter court battle with his former partners, Peter Koral is getting ready to expand his high-end Seven for All Mankind denim line.

Koral, chairman of L’Koral Inc. in Vernon, Calif., said he will take the label’s name and spin it off into categories such as shoes, perfume, childrenswear, sweaters and tops. A line of tops and childrenswear will debut at New York’s Fashion Coterie in late February, he said.

“We are very excited about Seven’s future and will expand the line now that it is ours to expand,” noted the veteran manufacturer, whose company also makes moderate-priced knitwear. Koral said Seven generated more than $175 million in revenue last year while his other misses apparel business brought in about $150 million.

Before Koral’s legal problems erupted, the Buxbaum Group in Calabasas, Calif., had been trying to sell the Seven for All Mankind line to a big East Coast company such as Liz Claiborne Inc. or Jones Apparel Group Inc. Koral said the denim line is not for sale now.

Koral and his former partners, designer Jerome Dahan and marketing executive Michael Glasser, launched the denim line in 2000. Two years later, the three were in a legal battle that did not end until early this year. The last chapter in the legal feud closed with Koral paying his former partners millions of dollars in a settlement.

The Seven for All Mankind denim line was conceived by Dahan, a former Lucky Brand Dungarees designer, and Glasser, a marketing executive who in 1990 helped start the Democracy denim label, which later was sold to the Kellwood Co.

Koral, who had a 50 percent share in the Seven label, was the financial backer. Dahan and Glasser, who provided the creative and marketing talent, were to receive the other 50 percent. The result was a high-end denim line that caught on quickly and now sells for more than $135 in stores such as Nordstrom Inc., Barneys New York, Saks Inc., Bloomingdale’s and Macy’s West. Seven is distributed to retailers in 64 countries.

The three agreed that once the denim line was profitable, it would be spun off into an independent company.

Dahan and Glasser said in court papers that Seven was generating more than $20 million in profits by 2002, but they had not seen any money and a new company had not been formed. Koral said the profits were being reinvested in the blue jeans venture.

At the end of 2002, Dahan and Glasser left the company, started a denim label called Citizens of Humanity and sued Koral for their share of the Seven venture.

Last September, Los Angeles Superior Court Judge James R. Dunn ruled that Koral owed his former partners $55.5 million.

At the time, Koral said he would appeal the decision. But later, he settled with the two: first with Glasser last fall, who sold his share of Citizens of Humanity to Dahan, and then with Dahan in January. “Jerome’s out of my life. I’m thankful for that,” said Koral, noting he recently wrote Dahan a check.

While attorneys for all three parties would not talk about the settlement, it is said to be close to what Dahan and Glasser had sought. —Deborah Belgum