California Apparel News

While the economic crisis was by far and away the major news story of 2008, it was not the only development in a year that saw retail sales gradually ebb as consumers juggled high gas prices, shrinking real estate values and the credit crunch.

Consumer confidence and retail sales weighed heavily on the minds of many apparel manufacturers, retailers and those who work in all the ancillary industries that make up the fashion business. Still, there were a number of significant deals struck in 2008.

Not Your Daughter’s Jeans sold a 50 percent stake in its misses denim business, and Hot Kiss sold a majority interest in its juniors brand. Laundry by Design and C&C California shifted from one apparel-giant parent (Liz Claiborne) to another (Perry Ellis International Inc.). And The Warnaco Group spun off nearly all its swim labels—including Anne Cole, Cole of California and Catalina—retaining only Speedo and Calvin Klein.

Meanwhile, the apparel and sourcing trade-show scene in Las Vegas got even larger with the addition of new shows When I Move You Move, ENK Vegas and the Guild. And California landed a new contemporary show, Class, which bowed in Santa Monica.

Plans were made for two new textile shows—GlobalTex, produced by the Dallas Market Center, and Material World West, produced by Georgia-based Urban Expositions—which will bow in 2009 alongside the longstanding Los Angeles International Textile Show.

Fashion-show producer IMG hosted its last fashion-week event in Los Angeles, as local indie producer BOXeight ramped up its offering and newcomer IDG World Expo announced plans to host its own event in 2009.

Year in Review: Mergers, Trade Shows and Economic Fallout in 2008

JANUARYThe Warnaco Group sold Anne Cole, Cole of California and Catalina to New York–based InMocean Group for $26 million. Anaheim, Calif.–based Pacific Sunwear announced plans to close its 154 d.e.m.o. stores, the hip-hop concept chain launched in 1998.New York–based manufacturing giant Liz Claiborne sold two of its West Coast labels, Laundry by Design (formerly called Laundry by Shelli Segal) and C&C California, to Perry Ellis International Inc. FEBRUARYThe merger between Los Angeles–based Fredericks of Hollywood and New York–based Movie Star was completed, forming a new publicly traded company called Fredericks of Hollywood Group. Business was steady but subdued at the January run of surf, skate and street trade shows Action Sports Retailer Trade Expo and Agenda in San Diego. Los Angeles–based juniors label Hot Kiss sold an undisclosed majority stake in the $100 million company to private-equity fund Bluestar Alliance for $20 million. Mossimo Giannulli, founder of the Mossimo line and owner of the Modern Amusement contemporary men’s label, purchased a stake in Costa Mesa, Calif.–based Paul Frank Industries. The MAGIC Marketplace and other concurrently running Las Vegas trade shows opened to stronger-than-expected traffic during their February run, but overall buying was cautious and strategic. Steve Maiman, co-owner of Stony Apparel Corp., testified before the House Subcommittee on Courts, the Internet and Intellectual Property in Washington, D.C., in opposition to the proposed Design Piracy Protection Act, which would expand copyright protection to fashion designs. Kellwood Co.—the $16 billion St. Louis–based parent company of Los Angeles–based Vince, David Meister and XOXO—merged with Boca Raton, Fla.–based private-equity firm Sun Capital Securities Group in a deal valued at $542 million. MARCHIDG World Expo, producers of tech-focused trade shows Macword and E3, announced plans to host a hybrid fashion and trade event in early 2009 called Reveal Los Angeles. Plans include runway shows at the new L.A. Live! facility in downtown Los Angeles, as well as a small trade-show component at the California Market Center. New premium-denim and contemporary apparel trade show Class debuted in Santa Monica, Calif., drawing buyers from Villains, The Closet, Macy’s West, M.Fredric, Fred Segal, American Rag, Lisa Kline and Blue Bee. Los Angeles–based buying office Directives West merged with New York–based Doneger Group. Directives West began operating as an independent division of Doneger Group. Costa Mesa, Calif.–based Paul Frank Industries struck a global-licensing rights agreement with Australian brand-management company Creata in a deal that turns PFI into a design and licensing company. Costa Mesa, Calif., retail center South Coast Plaza opened a 22,000-square-foot luxury wing called The Penthouse.Retailers were cautious with their spending, and exhibitors reported lighter-than-usual traffic at the Fall ’08 Los Angeles Fashion Market.More than 50 attendees turned out for the Los Angeles run of premium-denim sourcing trade show Kingpins. CIT Group Inc., the largest apparel factor on the West Coast, had to draw down on its entire $7.3 billion in emergency credit lines to pay debt maturing in 2008, citing “protracted disruption in the capital markets.”APRILThe Department of Homeland Security announced plans to pursue a program that would force companies to fire all employees who cannot provide adequate Social Security documentation following an audit of the company’s records. The “no-match” program, which is aimed at eliminating illegal immigrants from the American work force, could affect employment drastically for many California apparel manufacturers.Department-store buyers played it cautious and kept spending conservative at the Los Angeles Majors Market. After a six-year tussle over competing trademarks, Quiksilver Inc. won the latest and perhaps last legal round in a case involving Quiksilver’s Roxy trademark and Los Angeles manufacturer Kymsta Corp.’s Roxywear brand. Caruso Affiliated, owner of The Grove shopping center in Los Angeles, debuted its new lifestyle mall, The Americana at Brand, in Glendale, Calif. MAYTwo of Los Angeles’ major interlining and pocketing suppliers, Security Textile and QST Industries’ Los Angeles office, joined to form a new company, STC-QST LLC. Material World—the fabric, technology and sourcing show produced by Georgia-based Urban Expositions—announced plans to host a West Coast version of the show, called Material World West, in 2009.Los Angeles–based American Apparel completed the purchase of U.S. Dyeing & Finishing Inc., a Garden Grove, Calif.–based dyeing and finishing facility that has done work for the apparel giant for about 10 years. Market Center Management Co., owners of the Dallas Market Center, announced plans to launch a new Los Angeles textile show called GlobalTex in 2009. Los Angeles–based contemporary brand Morphine Generation partnered with Los Angeles manufacturer Urgent Gear, forming a new company called M Collective.JUNECity of Industry, Calif.–based retail chain Metropark USA registered with the Securities and Exchange Commission for an initial public offering of its common stock.JULYOrganizers of San Francisco Fashion Week canceled the event, which was scheduled for August, citing the need to “postpone the event until it can become more financially stable and also affordable for the area’s best design talent.”Greenwich, Conn.–based private-investment company KarpReilly LLC made an undisclosed investment in Alhambra, Calif.–based contemporary brand Trina Turk.Costa Mesa, Calif.–based skate brand Volcom purchased Laguna Surf & Skate, a two-store chain with locations in Laguna Beach and Alisa Viejo, Calif. Haywood, Calif.–based retailer Mervyns filed for Chapter 11 bankruptcy protection, citing a need to restructure its debt and realign its business operations. AUGUSTAmerican Trucking Associations filed a lawsuit against the ports of Los Angeles and Long Beach in an attempt to block portions of the ports’ new Clean Trucks Program, which requires all truckers to register with the ports in order to pick up and drop off cargo containers and to drive cleaner trucks.Huntington Beach, Calif.–based Tyr Sport Inc. sought unspecified damages from rival Speedo USA, a division of Warnaco Swimwear Inc., and U.S. Olympic coach Mark Schubert, charging them with violating several trade acts regarding the high-tech swimsuits produced by the two companies.Los Angeles–based People’s Liberation, maker of the People’s Liberation and William Rast labels, struck a deal with J. Lindeberg, the high-end Swedish menswear label. The two formed a partnership called J. Lindeberg USA LLC to market and operate the J. Lindeberg brand in the United States. The Stanford Wholesale Mart, a new wholesale showroom building in Los Angeles’ fashion district, opened with 109 units, four stories and an open-air atrium with a giant LCD screen. Los Angeles–based New Fashion Products purchased the Habitual premium-denim label and sister knits line 2K by Gingham from Pacific Marketing Works, which declared bankruptcy in February. German textile recycling company Soex opened a plant in Vernon, Calif., to house Soex West USA LLC as part of a pilot program to determine whether the U.S. market is viable for its professional recycling business for scrap textiles, samples and used clothing. Gerard Guez, owner of Tarrant Apparel and Seven Licensing Co., opened a new concept store called Live! On Sunset on Sunset Boulevard in Los Angeles’ Hollywood district. The second run of the Class premium-denim and contemporary trade show in Santa Monica, Calif., was held a few days before the giant trade shows in Las Vegas—a scheduling shift that met with approval from exhibitors and retailers alike. MAGIC International bowed new shows: eco-themed Ecollection and the contemporary streetwear section S.L.A.T.E. The giant trade show also debuted a new three-day format, and its Sourcing section opened a day early.

Several new shows bowed during the August run of MAGIC, including When I Move You Move at Caesars Palace, the new show launched by Christian Audigier, the man behind Ed Hardy and a host of other brands; ENK Vegas, the latest effort from Fashion Coterie and Collective producer ENK International; and the Guild, a menswear show launched by Orange County shoe designer George Esquivel, Jason Fischer and Dana Robinson. SEPTEMBER Traffic was light, but business was steady at the September run of the Action Sports Retailer Trade Expo and Agenda trade show in San Diego. After hosting the Los Angeles Fashion Awards for three years, organizers put the event on hold until 2009, citing the sluggish economy as the reason for the postponement. The owners of the Cupertino Square mall in Cupertino, Calif., filed for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court’s Northern District of California to protect the mall from an impending foreclosure sale.Los Angeles–based denim brand Not Your Daughter’s Jeans sold a 50 percent stake in the company to New York–based private-equity firm Falcon Head Capital for an undisclosed sum.Tarzana, Calif.–based Jolna Design Group, owner of the Bella Dahl and Pure Color denim brands, and Commerce, Calif.–based 4Whatitsworth, owner of the Tyte juniors label, partnered to launch a company called Salt LLC, which would produce a new young contemporary brand called Rewash. Jolna’s staff moved to the 4Whatitsworth headquarters in Commerce. OCTOBERRampage Clothing Co. founder Larry Hansel launched a new young contemporary brand called Golden State. Hansel’s license agreement to manufacture Rampage apparel for Iconix, which bought the Rampage label in 2005, recently expired. Despite the flagging economy, department-store buyers turned out for the Los Angeles Majors Market at the California Market Center in search of key items that would entice consumers to spend. Veteran denim maker Hubert Guez, previously with Azteca Productions International Inc. in Los Angeles, joined Los Angeles–based Ed Hardy as chief executive officer. Ed Hardy owner Christian Audigier, who previously held the chief executive officer title, remains artistic designer for the company. IMG, the New York–based producers of Mercedes-Benz Fashion Week at Smashbox Studios, hosted its last Los Angeles Fashion Week runway event in Culver City, Calif. Davis Factor, co-owner of Smashbox Studios said his company was considering hosting its own event in 2009. And representatives of BOXeight, the indie fashion-show production company launched in 2007, said its biannual event will continue in 2009. Exhibitors showing at the Los Angeles Fashion Market kept expectations low, but many reported better-than-expected orders. NOVEMBERThe stalled economy had major retailers—including JCPenney, Kohl’s and Macy’s—kicking off holiday sales promotions early to try to salvage the season. California boutiques and e-commerce sites soon followed suit. Los Angeles–based Blue Holdings Inc. formed a joint venture with Virginia Beach, Va.–based Headgear Inc. to expand distribution of Blue Holdings’ blue-jeans labels, Antik Denim, Yanuk and Taverniti So. MAGIC International, parent company of the MAGIC Marketplace and the Project Global Trade Show, announced plans to launch two new sections at MAGIC and to limit Project’s lineup to fewer and more-exclusive lines. MAGIC will launch a new premium-product section called Premium and a Hispanic-focused section called MAGIA in 2009. Irvine, Calif.–based high-end brand St. John introduced a new contemporary brand called SoCa and opened a retail location for the new brand at South Coast Plaza in Costa Mesa, Calif. Los Angeles–based designers Nick Verreos and David Paul of the Nikolaki label and Kevan Hall were among the designers on the runway at the inaugural Islands of the World Fashion Week in the Bahamas.Costa Rican lawmakers approved the country’s entry into the Dominican Republic–Central American Free Trade Agreement after several years of debate. Costa Rica was the last country to sign on to DR-CAFTA, which allows goods made in member countries to be shipped to the United States duty-free. After a trial that lasted more than a year and a half, Beverly Hills, Calif.–based designer Anand Jon was convicted on rape and multiple counts of sexual assault involving seven female victims ranging in age from 14 to 21. Huntington Beach, Calif.–based surf giant Quiksilver completed the sale of Rossignol in a transaction valued at 40 million euros, or approximately $50 million, to Chartreuse & Mont Blanc. DECEMBERIDG World Expo, producers of tech-focused trade shows Macword and E3, announced plans to postpone its fashion and trade event, Reveal Los Angeles, until October 2009, citing the economy as the reason for the delay. Costa Mesa, Calif.–based young contemporary label BB Dakota ended its licensing agreement with Irvine, Calif.–based nZania and struck a deal with giant South Korean conglomerate Samsung.Retailers offered steep promotions for Black Friday, the Friday after Thanksgiving, which typically kicks off the holiday shopping season. The deep discounts drew in shoppers, but analysts said the buying was limited to Friday and didn’t continue through the weekend. Online retailers, however, saw an uptick in spending of 15 percent on “CyberMonday,” the name given to the Monday following the Thanksgiving holiday. Forever 21 Inc. and Kohl’s department store signed an agreement to take over 46 Mervyns locations owned by real estate investment trust The Macerich Co. Mervyns filed for Chapter 11 bankruptcy protection in July.St. Louis–based Kellwood Co. announced plans to move three of its largest moderate brands to California. Sag Harbor, Koret and Briggs New York will move to the company’s Commerce, Calif., headquarters in mid-2009. IN MEMORIAMManufacturers Bank founder Leonard Weil, 85, April Ross Dress for Less founder Stuart Moldow, 81, JuneWicksman Pattern Service owner Martin Wicksman, 74, JuneGraphic designer and Web developer Jack Ren Marquette, 60, JuneDesigner Yves Saint Laurent, 71, JuneRetail buyer Adrian Damenstein, 70, SeptemberDesigner Eletra Casadei, 55, OctoberShowroom owner Susie Lehr, 52, OctoberDesigner and fashion commentator Mr. Blackwell, 86, October Photographer Luc Ekstein, 57, November Retailer Ron Ross, 61, November

2008 in Review: California’s New Stores

Despite the steadily declining economy, several new stores opening in California in 2008. Here’s a list of several high-profile openings in the state. For more store opening, see the “Chain Reaction” feature on ApparelNews.net.

New York–based Calvin Klein opened its first California store in the Beverly Center in Los Angeles. Alexander McQueen opened a store on Los Angeles’ Melrose Avenue. This is the British designer’s third store in the United States. New York–based Phillip Lim opened a 5,000-square-foot store on Robertson Boulevard. Lim is a California transplant who got his start with Los Angeles contemporary brand Development. Japanese streetwear brand Bathing Ape opened a store on Melrose Avenue in Los Angeles. Los Angeles–based high-end retailer H. Lorenzo opened a new eco boutique called H-L-M-R on Robertson Boulevard in Los Angeles. Surf brand O’Neill opened a 3,350-square-foot flagship store in the new Anaheim Gardenwalk center in Anaheim, Calif. European luxury labels Hermegrave;s and Alberta Ferretti opened new retail boutiques in Los Angeles.

2008 in Review: Retail Sales Month-to-Month

There were few solidly strong months for retail sales in 2008. Below, we’ve charted the reported sales month by month.

Holiday 2007 sales were slow, but high points were menswear and e-commerce. Retailers reported weak retail sales in January. Sales grew 0.5 percent over the previous January, according to the New York–based International Council of Shopping Centers. Retailers reported shaky gains in retail sales in February, with overall sales up 1.9 percent over the same period the previous year, according to the International Council of Shopping Centers. March was the weakest month for retail sales since 1995, according to the New York–based International Council of Shopping Centers, which found retail sales dropped 0.5 percent compared with the same month the previous year. April was the strongest retail sales month in more than a year, according to the International Council of Shopping Centers, which found that sales increased by 3.6 percent over the same month the previous year. Retail sales had a strong showing in May, according to the International Council of Shopping Centers, which reported a 3 percent increase over the same month last year. Discount and off-price stores helped drive June retail sales to a surprisingly good performance, according to the International Council of Shopping Centers, which found sales rose 4.3 percent over the same month last year. Discount retailers, including Wal-Mart and Ross Dress for Less, faired best in July, helping the retail sector to post a 2.6 percent gain over the same month last year, according to the International Council of Shopping Centers. Retail sales declined by 2.7 percent in November over the same period last year, according to the International Council of Shopping Centers, which said one of the few success stories for the month was giant discounter Wal-Mart. Back-to-School sales were slow in August, according to the International Council of Shopping Centers, which reported a 1.7 percent increase over the same month last year. Retail sales in October grew a scant 1.7 percent over the same period last year, according to the International Council of Shopping Centers, which had anticipated a 2 percent gain over last year. Retail sales in October were “simply awful,” according to a spokesperson for the International Council of Shopping Centers, which reported a 0.9 percent decline over the same month last year.