Tarrant Apparel Breaks Up With Another Licensor
Tarrant Apparel Group, the Los Angeles company that makes private-label and branded clothing for major retailers across the United States, said it paid $400,000 to terminate its licensing agreement with designer Cynthia Rowley.
Tarrant had been producing the Souvenir by Cynthia Rowley denim label since 2004, but the deal was terminated in July. No reason for the breakup was given.
Tarrant has had its share of label woes. Last year, Kmart discontinued distributing its Gear 7 casual menswear label. And this year, Tarrant went to court in New York over the JS by Jessica Simpson and Princy by Jessica Simpson denim labels it had been producing under a license with the actress. The clothing was sold at Charming Shoppes and other retailers.
In March, Tarrant and the House of Dereacute;on by Tina Knowles parted ways, after Tarrant obtained a three-year license last year to produce apparel for entertainer Beyonceacute; Knowles and her mother.
Nevertheless, on Aug. 14, Tarrant reported a solid second quarter. It had net sales of $59.1 million in the quarter ended June 30, a 17 percent increase over the same period last year. However, net earnings declined 30 percent this quarter to $611,000, down from $871,000 last year.
“The second quarter results reflected solid growth in sales, combined with improved margins and a significantly improved balance sheet,” Gerard Guez, Tarrant’s chairman and acting chief executive officer, said in a statement.
In a conference call with analysts, Guez said the company’s American Rag Cie label of casualwear is now being delivered to 600 Macy’s doors, up from 100 when the exclusive distribution deal with the retailer was struck in 2003. During the first six months of 2006, the label’s net sales were $15.5 million.
Tarrant’s other private-brand label, Alain Weiz, sold exclusively at Dillard’s, had $3.2 million in net sales during the first six months of 2006.
About 75 percent of Tarrant’s net sales comes from the private-label denim and casualwear business it does for major retailers such as Kohl’s, Mervyns, Chico’s, Mothers Work, Charlotte Russe and The Limited.
Guez predicted that revenues this year would be $220 million to $230 million. Last year, revenues were $214.6 million, with $1 million in profit. —Deborah Belgum
