Quick Turnaround on Innovo's Board
Faster than you can say “blue jeans,” a recently appointed board member has left Innovo Group Inc., the struggling apparel company in Commerce, Calif., that makes Joe’s Jeans.
The company announced June 19 that Paul Robb would be leaving the board of directors due to an unanticipated potential conflict of interest. He had been appointed to the board on June 8 and granted a nonqualified option with a 10-year term to purchase up to 75,000 shares of the company’s common stock at 75 cents a share. The stock has been trading at about 77 cents a share. Its 52-week high was $5.74 a share; its 52-week low was 50 cents.
Robb, a 30-year veteran of the retail apparel industry, is chief executive officer of the Lifestyle Design Group, the largest division of the Kellwood Company, the St. Louis–based apparel company that makes moderately priced clothing under various labels such as Koret, Sag Harbor and XOXO. The $2 billion company is growing by acquiring other companies such as Phat Fashion and Gerber Childrenswear. At one time, Robb was president of Kellwood’s menswear division.
“We regret that Paul is unable to remain on the board of directors,” Marc Crossman, Innovo’s president and CEO, said in a statement. “We were looking forward to Paul’s participation and guidance as a director. Nevertheless, we respect the circumstances which warrant Paul’s resignation at this time.”
In recent years, Innovo has been struggling to find a successful formula to make its blue jean design and production business profitable. In conjunction with hip-hop stars Eve and Bow Wow, Innovo made blue jeans under the Fetish by Eve and Shago by Bow Wow labels. Each had short life spans.
Innovo has had a string of money-losing years. In fiscal 2005, the company had a net loss of $16.2 million on $108.6 million in revenue. In fiscal 2004, it lost $9.5 million on $104.7 million in revenue, and in fiscal 2003, it lost $8.3 million on $83.1 million in revenue.
Earlier this year, Innovo announced it would sell all or part of the company. In mid-May, it sold its private-label division, which makes jeans for Target’s Mossimo label and American Eagle Outfitters, for $10.4 million to New York–based Cygne Designs Inc. —Deborah Belgum
