Blue Holdings Sets Turnaround Plan
After a disappointing year, blue-jeans maker Blue Holdings Inc. is hoping to turn the company around with a new five-point plan that should put the Commerce, Calif., venture on profitable ground.
Glenn Palmer, who took over in late July as the company’s president and chief executive, said he is trying to redefine and refocus each of the company’s four labels and lower their SKU count. The company’s labels are Taverniti So Jeans, Antik Denim, Yanuk and Faith Connexion. It discontinued its underperforming Life and Death label, with designers Alexandre Caugant and Philippe Naouri going their own way.
“Our growth initiative is to focus on existing business for profitable growth, maximize brand exposure and inventory reduction, and have quality and timely delivery,” Palmer told a group of potential financial backers April 4 at the annual B. Riley & Co. investors’ conference in Las Vegas.
Antik, which used to have its own stores, is now selling at Macy’s with a $148 to $168 price tag for its jeans. Premium-denim brand Yanuk was relaunched last February at a lower price point and sells at department stores including Macy’s and Dillard’s for $48 to $125.
On the higher end, Taverniti So fetches $168 to $300 at better department stores. To increase the label’s visibility among consumers, designer Jimmy Taverniti will be making an in-house appearance April 12 at Bloomingdale’s flagship 59th Street store in New York.
On the back end, Blue Holdings has reduced its inventory from $10 million to $6.2 million with the goal of shrinking it even further this year to $4 million to $5 million, Palmer said. Many blue-jeans companies are carrying loads of inventory in their warehouses, as blue-jeans sales haven’t been as brisk as before.
Some of these turnaround efforts came too late for Blue Holdings’ 2007 financial results. Preliminary numbers show that annual net sales totaled about $33.8 million, compared with $49 million in 2006. The company expects to have a pre-tax net loss of about $5.6 million in 2007, compared with a pre-tax net loss of $5.4 million in 2006.
Palmer is optimistic that this year the company will be in the black. He predicted revenues may fall to $29 million to $31 million, but pre-tax income could reach $1 million to $1.5 million. “We believe the days of unprofitability are behind us,” he said.
Meanwhile, the company is searching for a new chief financial officer. Larry Jacobs, who filled the position in late 2006 after Patrick Chow left to work for Tarrant Apparel Group in Los Angeles, will be leaving April 15.
Blue Holdings recently named Burt Damsky president of sales. Previously he was vice president of Southpole’s Lot 29 division. Alicia Gabaldon, who was director of merchandising at Rock and Republic, is now Blue Holdings’ vice president of merchandising. —Deborah Belgum
