Habitual Evolves Under New Ownership
It appears that after a turbulent start to the year, Los Angeles–based premium-denim brand Habitual has regained its stride, thanks to a new owner and a more conservative design aesthetic. Bobby Ahn, owner of New Fashion Products, Habitual’s denim manufacturer, purchased the brand and its sister knits label, 2K by Gingham, in April for $475,000 after the denim brand’s parent company, Pacific Marketing Works, declared bankruptcy in February. Now, with vertical production in place and sound funding, the brand hopes to prove it deserves to be in retailers’ good graces.
The brand, originally founded in 2001 by the husband-and-wife team of Michael and Nicole Colovos, has seen its share of legal wrangling. After Pacific Marketing Works acquired a 50 percent share in the company, both parties filed lawsuits with a variety of allegations. One case ended with the Colovoses being awarded $2 million. Ahn, who began producing jeans for the brand in early 2007, said despite its problems, he believed in the brand. After the brand declared bankruptcy, Ahn continued to produce and ship product. “We shipped product we controlled to maintain and preserve goodwill for the brand,” he said. New Fashion Products also produces jeans for J. Crew, Armani Exchange, Michael Kors, DKNY Jeans and Brooks Brothers. Habitual’s approximately 80,000 pairs of jeans account for 3 percent to 5 percent of New Fashion’s business.
Now, with Renee Raimondi onboard as brand director, Brad Jaco, co-owner of the bicoastal Namaste Showroom, heading up sales and a new designer about to be announced, Habitual is ready to continue the trajectory that took it into 500 stores at its peak.
“A lot has changed,” Ahn said. “As a company, Habitual is much more efficient from design through production. There is one step removed, and everything is done smoother, faster and in a more timely fashion.”
Raimondi agreed that the brand can only benefit from its new home at New Fashion’s Gardena, Calif., production facility. “The same eyes see every pair of jeans from start to finish, which is terrific for us. It allows us to always ship on time, perfect every detail and the quality is terrific. We are very happy to be here.” She estimates turnaround time for jeans now is two-and-a-half months to three months. Being owned by a manufacturer allows Habitual to offer perks to clients, including custom styles.
Jaco, who estimates sales in 2007 were somewhere between $6 million and $8 million, expects to have comparable sales in 2008. “A lot of retailers are coming back to the core denim brands because of the value, quality, timely shipping and name recognition they can’t always get from new brands. We’re building up our momentum again because we are a core brand, we have a strong brand identity and the consumer knows us,” he said.
Habitual executives acknowledge the brand has to regain the confidence of retailers. “The brand stumbled,” Raimondi said. “But we always shipped product; we never missed a delivery. Retailers knew we were going through a transition, and some stuck by us and we kept them updated.” With its retailer roster numbering closer to 300 now, Habitual is focusing and streamlining its men’s line on a clean aesthetic and maintaining the gimmick-free look of its women’s line. An as-yet-unnamed new designer, who is set to join the company in August, will be tasked with growing the brand’s offerings in future seasons.
“We’re still working to see what the damage was from the bankruptcy,” Ahn said. “We’re feeling out who we are going to continue to work with. It’s almost like a start-up.”
