The Market In Brief: February 2007

[TC]2 is busy at work on a special exhibit, tentatively dubbed the "Cool Zone," for this May's triennial SPESA Expo, Material World and Technology Solutions trade shows.

Show organizers have allocated a 4,000-square-foot pavilion at the Miami Beach event - which will take place May 8-10 - for [TC]2 to coordinate an exhibit that will visually and interactively demonstrate future supply chain strategies for the textile and apparel industries.

[TC]2 president and COO Mike Fralix said the exhibit may be called the "Cool Zone" because the intention is to demonstrate some "really cool stuff" that is taking place in the market.

The section will showcase technologies that support a totally digital textile/apparel supply chain, including corners of the exhibit that demonstrate digital applications for 3-D design/product development, sales/merchandising, distribution/shipping and manufacturing/conversion.

Fralix said the inspiration for the exhibit is the "USA Today" model. The newspaper gathers content from around the world and creates the daily newspaper digitally at its headquarters and then distributes the digital files to distribution points around the world. As a result, the information is converted into the finished product much closer to the target consumer market. The software and music industries are embracing a similar business model.

Within the Cool Zone, show attendees will be able to shop in a mock retail store and interactively design either a fashion T-shirt or a sweater. The product will be developed digitally and then converted, or manufactured, on-site using the latest in digital printing and garment knitting technology. The T-shirts and sweaters will be offered on a first-come, first-served basis. [TC]2 estimates it will produce approximately 100 of each item during the course of the event.

Attendees can pick up their finished garments at a mock dry cleaning store erected within the Cool Zone. This will demonstrate the concept that consumers in the future could easily pick up new garments and their dry-cleaned garments under the same roof.

[TC]2 has invited Alvanon, Assyst-Bullmer, Gerber Technology, i-fashion, Lectra, OptiTex, Shapely Shadow, Shima Seiki, SK C&C and TUKAtech to be a part of the Cool Zone's product development area. Many of these companies also are expected to be part of the exhibit's merchandising area, where visitors can see the latest in 3-D shape analysis, digital body forms, virtual try-on and virtual runways.

For printing the T-shirts, Yuhan-Kimberly is planning to showcase its new nano-colorant development, and in conjunction with [TC]2, will demonstrate the impact of printing fabric that does not require pre-treatment or post-treatment and can be fed directly to cutting. This will be the first demonstration of these nano-colorants in the Western Hemisphere, said Fralix, who described it as "breakthrough technology."

Gerber will provide cutting machinery and CF Rimoldi will provide the sewing equipment necessary to assemble the digitally printed shirts.

Shima Seiki has been invited to showcase its "Whole Garment Technology," taking orders from show attendees via [TC]2 and manufacturing digitally knitted sweaters. [TC]2 also may work with Shima Seiki to allow body scan data from [TC]2 to automatically alter the fit of the knitted garments.

Eton Systems has been invited to assist with the logistics of the laundry/dry cleaning "business" within the exhibit. Eton also may offer a web-cam type of monitoring system to enable attendees to observe the manufacturing/conversion process wherever they access the Internet during the show.

For more information: www.spesaexpo.com , www.material-world.com , www.techsolutionsexpo.com , www.tc2.com

American Apparel to Go Public

American Apparel Inc. and Endeavor Acquisition Corp. signed a definitive merger agreement last December, announcing that they would form a combined company, operating as American Apparel, expected to trade publicly on the American Stock Exchange or another national stock exchange.

American Apparel, which is known as the largest vertically integrated clothing manufacturer in the United States, employing more than 5,000 people, will remain headquartered in downtown Los Angeles, where it has the capacity to produce more than 1 million T-shirts per week.

Founder and CEO Dov Charney will remain CEO, and core members of the management team responsible for American Apparel's strong growth also will remain with the company, the firm reported.

There are 143 American Apparel retail locations in 11 countries worldwide. For the fiscal year ending Dec. 31, American Apparel was expected to generate sales of approximately $275 million. Sales and profits have expanded nearly eight-fold since fiscal 2002, the firm said.

As part of the deal with Endeavor, approximately 2.7 million shares of stock will be made available to American Apparel employees.

"This is an exciting time for American Apparel - acquiring the necessary financial foundation will give us the opportunity to realize our bigger dreams," said Charney. "By leveraging art, technology and design, we will continue to bring people clothes they love to wear. This transaction and the infusion of substantial capital from Endeavor will allow American Apparel to capitalize on the many opportunities in front of us ranging from improving our manufacturing processes to implementing our global growth plans."

Eric Watson, chairman of Endeavor, which defines itself as a "specified purpose acquisition company," said: "American Apparel is a unique company in the apparel manufacturing and retailing industry with a visionary leader, passionate employees and loyal customers. Its cutting-edge brand building efforts and vertically integrated 'made in downtown Los Angeles' operation have created significant brand awareness and a 'cult' status worldwide."

Dignity U Wear Seeks New Clothing Donations

Program Offers Tax-Deductible Option for Excess Inventory Dignity U Wear, the Jacksonville-based nonprofit that provides brand new clothing to men, women and children in need, is ramping up for another year of service and calling on apparel brands, manufacturers and retailers to donate their apparel.

To distribute the clothing efficiently, Dignity U Wear has developed relationships with approximately 260 social service agencies and nonprofits working with disenfranchised populations across the United States.

The organization reached a major milestone last year when it distributed its 2 millionth piece of clothing to its 200,000th client, for overall donations valued at $32 million. To put the agency's growth in perspective, during its first year of operation from April 2000 to April 2001, the organization distributed 43,385 pieces of clothing. By the end of 2004, the total had reached 876,236, and then surpassed the 1 million mark six months later in June 2005. Dignity U Wear doubled that level of distribution in July 2006, when the total surpassed 2 million pieces (including more than 350,000 pieces that were donated and distributed for hurricane and tsunami relief).

Dignity U Wear was founded by philanthropist and Holocaust survivor Henri Landwirth, who has stated: "I know what it means not to have clothes - to be stripped of dignity and to give up all hope. And when I see children suffering indignities, I know we have to help."

The organization, which can accept boxes or truckloads of apparel, processes the goods at its receiving and distribution center, and has volunteers charged with counting and inventorying of garments. Dignity U Wear has an ordering system that enables its partner charities to specify the sizes of the persons in their communities who need clothing. Then Dignity U Wear handpicks and ships the correct sizes and types of apparel to the nonprofit partner for distribution to those in need.

"Most of us can only imagine what it feels like to flee an abusive relationship or struggle to break the cycle of poverty to give our kids a better life," said Jim Diehl, executive director. "For people in these situations and others, self esteem and self-respect are critical to overcoming obstacles and getting back on their feet. And nothing can help do that faster than putting on new clothes that make them feel better about themselves."

For a child, brand new clothes mean a chance to walk into the classroom with head held high, he said, noting that Dignity U Wear also helps restore self esteem to adults who struggle to feed and shelter their families. With new clothes, they can find better jobs and a more successful future. "How you look is directly related to how you feel. And for people trying to rebuild their lives, it's a great place to start," added Diehl.

Landwirth, who had a successful career as a hotelier, began providing new socks and underwear to the homeless, and his organization expanded as it began to receive donations from manufacturers and retailers of all types of clothing. Stein Mart is a major supporter of the Dignity U Wear program, and helped jumpstart Dignity U Wear in its early years by recruiting its apparel vendors to make donations. Today more than 200 apparel brands and retailers donate directly to Dignity U Wear.

For more information: www.dignityuwear.org

Brandot Invests in Julianna Rae

Brandot International Ltd. has invested growth capital in Julianna Rae Inc., a rapidly growing designer and multi-channel distributor of upscale women's intimates, sleepwear and loungewear.

Founded in 2004, Julianna Rae has grown 300 percent year-over-year through its consumer-direct Internet sales ( www.juliannarae.com ) and catalog operations, reported Brandot, which owns equity in more than 15 apparel and textile businesses in nine countries.

Last year Julianna Rae added a third channel of distribution by providing luxury loungewear and sleepwear to premier resorts and spas. The company's original designs are the creation of Juli Lee, founder and chief merchandising officer. Lee is an industry veteran who has designed and merchandised for leading women's apparel brands.

"We are very excited about becoming a stakeholder in a growing brand such as Julianna Rae," said Martin Trust, president of Brandot, and also a veteran of the apparel industry, having founded Mast Industries. "Our philosophy is to invest in people who are passionate about their business. The entrepreneurs of Julianna Rae have demonstrated they have identified a growing market for upscale intimates, sleepwear and loungewear for women over 35 years."

Julianna Rae's president, Bill Keefe, said: "This investment will provide Julianna Rae the capital to continue to ramp up product development and customer acquisition and the opportunity to work closely with Brandot's global network of apparel manufacturers."

Whole Foods Picks Up Indigenous Designs

Whole Foods has added the Indigenous brand of organic apparel to its fashion offerings sold in its stores from San Diego to Vancouver, British Columbia.

"In a society where Whole Foods epitomizes the integration of quality 'organic' into the mainstream marketplace, it's essential that any apparel they carry evolve to the same premium level as the rest of their products," said Scott Leonard, co-founder of Indigenous. "We indeed fulfill that promise."

Since its inception in 1994 - before the idea of organic food, let alone apparel, had reached its awkward adolescence - Indigenous' success as both an organic clothing supplier and a fair trade employer has continued to grow. As Whole Foods' No. 1 clothing supplier in the Pacific Northwest, the company provides hand-made apparel by artisans from more than 275 knitting cooperative groups in Central America, South America and India.

"Indigenous artisans have the opportunity to earn twice what they would make working independently, and just as important, preserve their rich cultural traditions of knitting and weaving that span over a thousand years," said Matt Reynolds, co-founder of the company. "This is a fact supportive of our company mission statement: Our path is chosen - we make clothing that honors both people and the planet."

For more information: www.indigenousdesigns.com

Caribbean Soul Goin' Coastal

Tropical art and clothing company Caribbean Soul has changed its name to Goin' Coastal to appeal to a larger, national audience.

The brand, which produces casual tropical attire, will continue to produce its signature tropical-themed apparel lines that offer an "escape" experience to consumers, with images ranging from lazy surf-side getaways to crazy island beach parties.

The company will continue to develop its well-known images such as Sal the Lizard and Doc the Parrot, but will also introduce new characters, landscapes and styles, in addition to focusing on increasing the quality of the products. For example, it will offer a new, custom-made, side-seamed T-shirt featuring an oversized spec as well as softer, heavier 6.1-ounce cotton.

For more information: [email protected]

Evisu Plans U.S. Expansion - Appoints Starsmore as CEO

Evisu, a company known for its handcrafted and premium denim apparel, is planning significant expansion in the United States under the leadership of its new North America CEO Nick Starsmore.

Previously president of global retail for Evisu, Starsmore is heading up the firm's new U.S. headquarters on Greene Street in New York's Soho. He plans to open 10 stores in the United States, and to make Evisu's Asian, European and American lines available to North American wholesale customers.

The firm's initial retail plans call for opening Evisu stores in SoHo, Las Vegas and Los Angeles.

Prior to joining Evisu, Starsmore was a private consultant to both U.S. and European skate/surf, outdoor and fashion brands developing global retail, distribution and sales strategies.

For Your Reading List 

A couple of new books offer insights for apparel entrepreneurs and seasoned industry veterans alike.

Crossing Fifth Avenue to Bergdorf Goodman: An Insider's Account on The Rise of Luxury Retailing, by former Bergdorf Goodman chairman and CEO Ira Neimark, shares many stories of the legendary retailer's career climb from doorman assistant to executive. It explores how he transformed Bergdorf Goodman from an "old, dull, expensive and intimidating store," into a "young, exciting, expensive and intimidating store" that became first in luxury and glamour. Replete with intriguing personal anecdotes about the world's most famous fashion personalities, the book features sections on "Lessons Learned" in each chapter.

The Wardrobe Shrink, by Sarah Whittaker, is a 95-page illustrated guide of clothing styles categorized according to body shape. Body shape silhouettes are provided for readers to analyze their body and face shape. They can then look through the guide and check out styles and fashions that correspond to their shape. While geared to consumers, the book also can benefit apparel businesses that are focused on fit issues.

Career Moves

- Esprit Holdings Ltd. has elected Heinz Jorgen Krogner-Kornalik, group CEO, as chairman of the board. John Poon Cho Ming, group CFO and company secretary, has been re-elected as deputy chairman.
- The Needlers Foundation, a philanthropic organization that works to benefit children in need, has appointed Michael F. Cipriani as president. Cipriani is an executive vice president at Rosenthal & Rosenthal, a privately held factoring and finance company.
- NexCen Brands Inc. has hired Charles A. Zona as executive vice president of licensing and brand management. Zona had his own consulting practice, following roles as senior vice president for consumer products for NFL Properties and senior vice president at Lord & Taylor.