California Apparel News

Vernon, Calif.–based denim giant True Religion Apparel saw its first-quarter gross margin grow a record 56.3 percent, but it missed its projected target of $39.9 million in net sales, ringing in instead at $36.1 million in net sales for the first quarter of 2007. That’s only a 1.4 percent hike in revenues over its $35.6 million in sales for the same time last year—and all the growth was swallowed up by $2.4 million in charges. True Religion had been hoping for a 12 percent jump.

The first quarter of 2007 saw a drop in wholesale sales and a significant jump in True Religion’s consumer-direct sales. Including retail sales and branded retail, the denim maker’s sales to consumers totaled $4.1 million—up from $677,000 during the first quarter last year. The rollout of new True Religion stores accounts for the huge jump—but it’s also responsible for the drop in wholesale sales to other retailers. In the first quarter of 2007, True Religion sold $25.1 million worth of apparel to retailers, down from $25.6 million during the same period last year. Overseas sales also saw a slump, with only $6.9 million in international business, down from $9.3 million during the first quarter of 2006. The company said the decrease reflects slower sales in Japan. Still, the company reiterated its financial guidance of approximately $167 million in net sales and a 20 percent increase over 2006.

“We are off to a strong start for the year,” said Jeffrey Lubell, chairman and chief executive of True Religion, in a statement. “Our business is on plan, and we believe we have made the right investments over the past six months to further secure our foothold as a denim-inspired icon brand.”

True Religion has been making news of late with the steady stream of new stores, the departure of Kymberly Gold Lubell—wife of Jeff Lubell and the company’s vice president and design director—andthe addition of several key executives. So far this year, the company has hired Peter Collins as chief financial officer, Marc Klein as vice president of retail, Rodney Hutton as senior vice president of merchandising and Caius Olowu as senior designer for women’s sportswear.

At press time, True Religion’s stock was trading up 3.57 percent at $15.65 per share.

Desert Blue, International Flare

Launched for Spring 2007, Los Angeles–based denim brand Desert Blue Jeans takes an international approach to women’s premium denim. Owner Miranda Carmona sources her fabric in Italy, washes her jeans in Los Angeles and produces her laser-cut pocket treatments in Paris. A 25-year veteran of the denim industry (she worked for Max Azria in the early days of BCBG, was there when Paul Guez first launched Sasson Jeans in the 1970s and later worked for Joe’s Jeans), Carmona said her attention to detail is what drove her to country-hop when designing her own brand.

Zen Warne, Desert Blue’s sales and marketing director, said they go wherever the best resources are. “In Italy, Miranda developed a denim fabric with just the right amount of stretch with the highestquality Lycra. Los Angeles has the best wash houses, and we developed a special five-process wash to give the denim an extra-soft hand. And in Paris we found a company that hot-lasers two layers of denim together and then cold-laser cuts them for a precise, two-dimensional design without stitches,” Warne said. Inside each pair of jeans is a tag that says the jeans are “a global undertaking” and lists the provenance of each component.

With its six styles wholesaling from $70 to $92.50, Desert Blue is betting that women ages 20 to 40- plus will appreciate the denim’s worldliness. “We’re targeting a modern, contemporary woman,” Warne said. Silhouettes range from slim (but not skinny) to straight leg and trouser cut to highwaist boot cut. Each pant features a different pocket treatment and yoke to flatter the behind. Washes range from dark indigo to gray and black. A collection of colored denim accompanies each season.

Desert Blue sells at Jeany, Sy Devore and Pret-A-Porter.

A collection of men’s denim is in the works for next year. For more information, call (310) 477-1040.