California Apparel News

Carole Little is getting back into the brand game with the launch of a new apparel company. Her reemergence in the fashion industry comes after a detour that separated the designer from her eponymous brand label and left her mired in a web of litigation.

Little—whose former company, CL Fashion Corp., shuttered three years ago after parent company Chorus Line Corp. filed bankruptcy—quietly launched a new company with longtime business-partner Leonard Rabinowitz under the name StudioCL Corp.

The two have been working on private label projects since opening StudioCL two years ago and are now preparing to launch a contemporary misses collection, called Linq, which will be geared toward better department stores nationwide. With retail price points starting at $59, the 20-piece collection uses soft crepe, denim and various stretch fabrications for styles such as fitted blouses, stylish pants and feminine-looking skirts with ruffles.

Little’s longtime relationships with major retailers such as Federated Department Stores Inc., the May Department Stores Co. and Nordstrom Inc. was a pivotal factor in the company’s decision to launch a contemporary collection, Rabinowitz said. Firstyear sales are expected to reach $10 million. The company recently opened a 2,000-square-foot showroom in New York.

The launch of a new contemporary line is just one of several new projects in the works at StudioCL. A few months ago, the company landed an exclusive agreement with the QVC shopping channel to produce a misses apparel line called In Encore. Little, who has made appearances on the Home Shopping Network and is no stranger to television, raked in sales of more than $500,000 during her first one-hour on-air presentation for QVC.

“What I really like about QVC is you can talk to customers who call in while you’re on air,” Little said. “You can learn a lot from that, and it really puts you in touch with your customer.”

Corry McFarland, in QVC’s publicrelations department, said the collection and the designer have resonance with QVC’s viewers.

“There are several reasons why Carole Little is a great fit for QVC,” McFarland said. “First, Carole has a large allegiance of customers who remember her department store distribution. Secondly, a large segment of QVC’s audience is of the age and demographic to which the line appeals. Third, Carole has always stayed true to the positioning of the line—fluid, rayon dressing, prints, colors and patchworks—all of which are popular today. Additionally, Carole is passionate about the products. Her excitement is evident on air, and our customers truly respond to her.”

Producing a line for QVC, which holds a 600-page vendor manual, is a much-anticipated challenge for Little and Rabinowitz.

“QVC is very detail-oriented with respect to quality,” Rabinowitz explained. “Every step in the production process goes through inspection, and the measurements must be precise; they want their customer to know what to expect.”

QVC digitizes all the apparel into a master file in the network’s live motion library, which can be accessed on air to provide closeup shots of products. Little and Rabinowitz are intrigued by this process.

“It’s a different [mindset] than shipping to a department store retailer, where apparel orders sometimes sit in boxes for weeks before they’re used to replenish inventory,” Rabinowitz said. “You’re there, and it’s show time! You’ve got to sell it during that hour that you’re on the air, and they’ve got it wired.”

Little will next appear on QVC on Oct. 30. McFarland said the network is planning to air two more shows featuring the designer and the In Encore line this spring.

But QVC’s fast pace is just a warm-up for what lies ahead for StudioCL.

“The common thread through all of this is that each of our buyers wants to work closer to the delivery time,” Rabinowitz explained. “Back when we were a department store supplier, we worked a year ahead; this process might take some getting used to.”

Difficult days

The launch of the collections is sort of a homecoming for Carole Little, whose moniker no longer appears on her own label, and a turning point for the pair, who just three years ago found themselves entangled in litigation with Chorus Line Corp.’s parent company, Levine Leichtman Capital Partners, which acquired the Carole Little brand through the acquisition of Chorus Line. The investment firm filed voluntary bankruptcy for both companies a few months after the acquisition, laying off more than 300 workers and combining debts of more than $70 million.

It was a devastating end for a company that had been one of the most recognized West Coast labels, with sales of more than $375 million at its peak in the early 1990s. Back then, Carole Little had employed some 1,000 workers at the company’s 288,000-square-foot facility in downtown Los Angeles.

Since the closing of their company, Little and Rabinowitz have split their time between litigating with Levine Leichtman over the failed merger transaction and parlaying their longtime industry acumen into new opportunities.

The partners have been busy designing and producing private-label apparel for a pair of better department store chains, which they declined to identify. “The line is a blend of signature Carole Little style merchandised by what the stores stand for,” Little said.

New beginning

The Carole Little brand still exists, thanks to a licensing agreement with The TJX Companies Inc.

“Carole Little is still a very strong brand name,” said industry executive Robert Margolis, whose Van Nuys, Calif.–based company, Cherokee Inc., acquired rights to the trademarks of CL Fashion, including the Carole Little and St. Tropez brands, two years ago for $1.7 million. Cherokee, which operates a retail direct-licensing program, licensed the Carole Little and St. Tropez brands to the TJX Companies, with the option to buy the labels at the end of the five-year agreement. Rabinowitz and Little have a 45 percent stake in the TJX licensing deal, which puts Carole Little apparel in the company’s T.J. Maxx and Marshalls stores.

“TJX is just the right venue for Carole Little,” said Margolis. “It’s a good place to build the brand. The American consumer likes what TJX serves up. This is in line with the overall trend of retailers embracing highprofile consumer brands. The retailer today needs to have differentiation and needs to expand their margins and develop exclusive product.”

Keeping it focused

StudioCL’s headquarters in Los Angeles has a staff of 14 employees, including fabric artists, a merchandiser, a patternmaker, a sample maker and a controller. The 7,000-square-foot loftlike office space is quiet and productive.

StudioCL’s pared-down staff and small space bear little resemblance to CL Fashion at its height—and the partners prefer it that way.

“In the old days, everyone was on overtime 10 days each month, and 10 days each month I didn’t have enough work for everybody,” Rabinowitz said. “That’s a very inefficient way to do it.”

Little and Rabinowitz have also taken time to reflect on their business strategy. “We had to rethink our business model and learn how to do this on a very low overhead so we can compete in the market by passing on the savings both to the retailer and to the consumer,” Rabinowitz explained.

Remarking on the turnaround cycle in today’s apparel market, Rabinowitz said, “The common thread that each channel of distribution has in common is that each wants to work closer to delivery time.”

To meet buyers’ and consumers’ demands, the company has decided to run a leaner ship by performing 100 percent of its sourcing and production overseas.

In the past, the partners’ goal was to produce apparel that would provide retailers with a 50 percent markup. Rabinowitz said the increase in manufacturers who produce offshore at lower prices makes it difficult to compete in the market and still produce domestically. By producing StudioCL’s lines offshore, the company will be able to maintain a low overhead and also offer retailers a 68 percent markup. “We’re using all of our good foreign sourcing connections from over the years,” Rabinowitz said.

Both partners admit they are not interested in regaining ownership of the Carole Little brand but would rather have a fresh beginning with StudioCL.

“If I could do it all over again, I would have kept the Carole Little label small,” said Little. “Becoming a large company forces you to tie everything together every day instead of designing and drawing, which is what I love doing. I’m not even trying to design something the whole world can wear. My focus is on a certain customer. And, to me, that customer is a contemporary baby boomer.”