IMPORT/EXPORT
Hudson Jeans Shifting Production from U.S. to Mexico
Hudson Jeans is bound for Mexico.
The Los Angeles premium-jeans maker was recently acquired for $98 million by Joe’s Jeans, another LA-based denim-pant maker. For some time, Joe’s Jeans has made all of its pants in Mexico. Now, Joe’s Jeans executives plan to take Hudson’s production south of the border, too, in order to reduce production costs by about 20 percent to 35 percent.
“We’re aggressively moving product down to Mexico, which is what we envisioned as we first put this deal together,” said Hamish Sandhu, chief financial officer for Joe’s Jeans, who was speaking on a conference call about Joe’s first-quarter financial results. “The Hudson business is running at about 1.5 million units, give or take. So there is a tremendous opportunity. But everything we do today, obviously, you have to bring the fabric in, to move the fabric, cut, and wash and [fill in] so they [will] take a while to run through the inventory.”
Joe’s Jeans executives said production in Mexico would be up and running for Hudson Jeans sometime this fall. “Make no mistake, there is a huge opportunity here to dramatically reduce the cost per garment on the Hudson side of the business and that we remain fully committed to and fully excited about because that’s where we’ll get the real cost savings,” Sandhu said.
For the first quarter, the newly combined Joe’s Jeans showed a smaller fiscal net loss and a boost in sales, both attributed to its acquisition of Hudson Clothing Holdings Inc., completed on Sept. 30.
For the first quarter ended Feb. 28, Joe’s Jeans reported a net loss of $2.2 million compared with a net loss of $6.4 million for the same period a year earlier. The net loss was affected by charges and other costs related to the acquisition.
Sales rose 61 percent to $47.3 million. Hudson brought in wholesale net sales of $17.3 million.
