2016 Newsmakers: Israeli Manufacturing Giant Buys Three LA Contemporary Labels

Three high-profile brands that epitomize the California lifestyle vibe were sold to Delta Galil this year, an Israeli clothing company known for making childrenswear, activewear and other garments for men and women.

The three labels—7 For All Mankind, Ella Moss and Splendid—had been owned by VF Corp. and were sold for $120 million. The deal was considered a bargain. VF Corp. originally bought the labels for more than $1 billion several years ago and saw revenues from the three drop several years in a row. Delta Galil will be adding $300 million a year in revenues to its bottom line next year.

The three contemporary sportswear brands are known for their luxury fabrics and trendy designs that help them command prices that go well over $100 a garment.

A few months after acquiring the brands, Delta Galil laid off more than 100 employees and decided that it would eventually fold the 7 For All Mankind office in Vernon, Calif., into the downtown LA headquarters of Ella Moss and Splendid.

The cuts at the three contemporary labels went across several departments including marketing, merchandising, retail, design and operations, sources said.

In September, Delta Galil hired Paula Schneider to be the new chief executive of the three labels. Previously, she had been the CEO of American Apparel, whose offices are located right next door to Splendid and Ella Moss.

Delta Galil is a more than 40-year-old clothing company based in Tel Aviv. It owns several lingerie brands as well as P.J. Salvage, a sleepwear and loungewear brand in Irvine, Calif., that it acquired last year. Its other labels include Schiesser, KN Karen Neuberger, Nearly Nude, LittleMissMatched and FIX.

7 For All Mankind was started in Los Angeles in 2000 by Peter Koral, Jerome Dahan and Michael Glasser during the height of the premium-denim boom.

Splendid and Ella Moss were created by Moise Emquies, a lawyer, with revenues reaching $95 million for the two labels in 2008.