Textiles and Bedhead Was Born
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NEWSPAPER 2ND CLASS $2.99 VOLUME 73, NUMBER 28 JULY 7–13, 2017 THE VOICE OF THE INDUSTRY FOR 72 YEARS MID-YEAR FINANCIAL REVIEW Solid Economic Growth Pushes Online Sales With Traditional Stores Revamping Their Fleet By Deborah Belgum Senior Editor Retail sales are inching forward this year with a strong nudge by online purchases fueled by millennials who pre- fer shopping on their smartphones and computers. According to Kiplinger, a publisher of business fore- casts and personal finance advice, e-commerce sales are expected to mushroom 15 percent this year, compared with 13 percent in 2016. On the bricks-and-mortar side, in-store sales are only expected to rise at a 2 percent rate. Most challenged will ➥ Finance page 3 Fashion Business Inc. ALISON A. NIEDER Italian mills Candiani and Gruppo Albini joined forces to showcase innovation in Italian denim design at the Candiani Los Angeles Design Center in downtown Los Angeles. For more from the event, see page 6. Shutters After Nearly 20 Years True Religion Files for Chapter 11 Bankruptcy Protection By Alison A. Nieder Executive Editor By Deborah Belgum Senior Editor interruption with the help of a loan from Citizens Bank N.A. After helping startup and growing apparel companies for True Religion, once a high-flying premium-denim brand for up to $60 million. nearly two decades, Fashion Business Inc. will shutter op- so popular its blue jeans were constantly being knocked off “By dramatically improving our capital structure 24 erations at the end of August. by counterfeiters, filed for Chapter 11 bankruptcy protection months in advance of our term-loan maturity, we will con- The news came as a shock to many in the apparel indus- on July 5 in U.S. Bankruptcy Court in Delaware. tinue business operations as usual and provide our employees try, who heard about the closure shortly after founder Frances The Los Angeles clothing company said it had $483 mil- and business partners the long-term stability they need,” said Harder informed the nonprofit organization’s board of direc- lion in outstanding debt. In a restructuring support agreement John Ermatinger, president and chief executive of True Reli- tors on July 2. with lenders, True Religion said it will reduce its debt by gion, in a statement. True Religion has 621 full-time employ- Harder started the organization in 1999 after a career spent $350 million by converting loans into equity. The company ees and 1,084 part-time employees. teaching fashion design at the Fashion Institute of Design expects to emerge from bankruptcy in 90 to 120 days and True Religion is just one of the latest apparel and retail & Merchandising, California Design College and Otis return to normal operations. ventures struggling to make it in a world where shoppers are College of Art and Design as well as creating her own de- Meanwhile, the company will continue to operate without ➥ True Religion page 2 signs for the likes of Priscilla Presley and the Sultan of Brunei. After running into stumbling blocks with her own designs, BedHead Wakes Up With a New Owner ➥ FBI page 4 By Deborah Belgum Senior Editor Renee Claire dress line until dresses started to go out of style INSIDE: in the late 1990s. Where fashion gets down to business SM BedHead Pajamas, the nearly 20-year-old Los Angeles She was delivering what she thought was her last collec- sleepwear company, has been acquired by Komar for an un- tion of dresses to a local retailer when she saw a pair of pa- disclosed price. jamas in the window of a boutique and thought she could Komar—a New Jersey company started in 1908 that makes design a better pair of PJs. intimate wear, sleepwear and childrenswear—said BedHead Quickly she learned to make her own colored and pat- will continue to operate as a distinct business unit and remain terned cotton textiles and BedHead was born. in Los Angeles while still manufacturing in the United States. According to the pajama company, in three years it was “Komar has the vision to help us to continue to build the producing more than 50,000 pairs of pajamas a year that were 7 8 BedHead brand while remaining true to the identity that locally cut and sewn. we’ve worked so hard to build,” said BedHead founder and BedHead pajamas frequently have been seen on the large Retail Sales ... p. 3 owner Renee Claire in a statement. “We are excited about the and small screen, including in TV shows such as “How I Met Denim ... p. 6 possibilities and could not imagine a better home for Bed- Your Mother,” “Sex and the City,” “The New Adventures of Head.” Old Christine” and “2 Broke Girls.” New Resources ... p. 7 Claire, who grew up in Canada, moved to Los Angeles in BedHead has a flagship store at 8663 W. Third St. in Los Swim Resources ... p. 8 1981 after graduating from college with the idea of starting Angeles and is sold at more than 1,500 boutiques and depart- Resource Directory ... p. 9 a dress company. For five years, she designed and made the ment stores including Neiman Marcus and Nordstrom. ● www.apparelnews.net 01-4.cover.indd 1 7/6/17 7:21 PM NEWS Home Shopping Network Is Being Acquired by QVC Two big television shopping cable net- ing. It also sells home and apparel brands works will now be one. through its Cornerstone business, which QVC has agreed to acquire HSN and its markets products through catalogs, branded various home and apparel lifestyle brands for e-commerce websites and 14 retail and out- $2.1 billion. let stores. The Cornerstone brands include QVC parent Liberty Interactive already Ballard Designs, Frontgate, Garnet Hill, owns 38 percent of HSN shares and is ac- Grandin Road and Improvements. quiring the other 62 percent. On the Home Shopping Network, elec- Competition is getting steeper for home- tronics and home goods made up 53.5 per- shopping programs on cable TV as more cent of sales, beauty and health products people gravitate to their mobile phones to were 23.3 percent of sales, fashion and ac- shop for their favorite items—from jewelry cessories were 15.3 percent of sales, and and clothing to BBQ grills and patio tents. jewelry accounted for 7.9 percent of sales. QVC Chief Executive Officer Mike George, left, at last year’s opening of the company’s first West HSN and QVC also have e-commerce sites. HSN reported $3.56 billion in revenues in Coast distribution center in Ontario, Calif., pictured right HSN, based in St. Petersburg, Fla., broad- 2016, a 3 percent decline over the previous casts to 95 million households in the United year. HSN’s headquarters will remain in St. dent and Chief Executive Mike George. boost more development in e-commerce and States via cable as well as online stream- Petersburg and be overseen by QVC Presi- “HSN founded the industry 40 years ago mobile and Internet platforms; optimize pro- and helped it grow with exciting initiatives gramming across five U.S. networks; cross like Shop By Remote and media integra- market to better engage existing and poten- tions with leading content producers. By tial customers; and improve financial options creating the leader in discovery-based shop- due to HSN’s lower debt level. ping, we will enhance the customer experi- The deal should close during the fourth ence, accelerate innovation, leverage our re- quarter of this year. sources and talents to further strengthen our Last year, QVC opened its first West brands, and redeploy savings for innovation Coast distribution center in Ontario, Calif. and growth,” George said in a statement. “As Scheduled to be at full capacity by 2020, the the prominent global video commerce retail- new D.C.—spread across 1 million square er and North America’s third largest mobile feet of space—is anticipated to handle more and e-commerce retailer, the combined com- than 20 percent of QVC’s total shipments. pany will be well-positioned to help shape Eventually, the Ontario distribution center the next generation of retailing.” will employ 1,000 people. The Ontario D.C. QVC expects the merger to increase will join a networks of distribution centers in QVC’s competitive edge; create cost reduc- Virginia, Pennsylvania, North Carolina and tions and revenue-growth opportunities; South Carolina.—Deborah Belgum QVC started as a direct-to-consumer cable channel in 1986. The company has grown to also include programing across the world in places such as the United Kingdom, Germany, China and Japan as well as e-commerce operations and mobile shopping. True Religion Continued from page 1 things were going fine until 2013, the year perusing the Internet for clothing rather than revenues hit $490 million. The company be- hitting the shopping malls. gan experiencing declining sales caused by For years, much of True Religion’s expan- the general trend of consumers veering away sion came from its own stores. At the time of from traditional retail to online shopping. its bankruptcy filing, True Religion had 128 “The volume of retailers either going out stores—73 are full-price stores, 53 are out- of business, over-inventoried or closing a SOLEIL CAPITALE let locations and two are Last Stitch stores. significant number of physical locations has Another 11 stores are outside the United created a highly competitive promotional en- States. Its collections are also sold at nearly vironment,” causing the denim company to 500 locations in the United States, Mexico resort to big sales to drive traffic, bankruptcy and South America, including Nordstrom, filings said.