California Apparel News

Eight months ago, Israeli-based Delta Galil acquired three Los Angeles premium brands from VF Corp. and then laid off scores of people.

In paperwork filed with the state Employment Development Dept., the number of people let go in September was listed as 105, but a Delta Galil spokesperson said that was really 65 because the same jobs were counted twice for Vernon and Los Angeles.

Now that Delta Galil is moving forward with new plans to maximize the profits at 7 For All Mankind, Splendid and Ella Moss, the new owner is laying off another 88 people, according to filings with the California Employment Development Dept.

In paperwork received by the state in mid-February, 66 people were being let go at 7 For All Mankind, headquartered in Vernon, Calif., and another 22 at the headquarters of Splendid and Ella Moss near downtown Los Angeles. The layoffs are to be effective April 10.

Calls and emails to Delta Galil, with U.S. offices in New Jersey, were not returned to explain the dismissals.

When Delta Galil bought the labels from VF Corp. for $120 million in late June, the company’s chief executive, Isaac Dabah, said he was hoping to close some of the brands’ unprofitable stores while growing the labels. Also, the large 7 For All Mankind headquarters in Vernon was expected to be closed and merged with the Ella Moss and Splendid offices off of Alameda Street.

There has also been a lot of shuffling of top executives at what is now called DG Premium Brands, which encompasses the three Los Angeles labels. In October, Barry Miguel, who had been president of 7 For All Mankind since 2011, left the company.

Also in October, Paula Schneider, who had been serving as the chief executive officer of American Apparel, was named chief executive of DG Premium Brands while Susan Kellogg, who had been the president of DG Premium Brands, continued on as a consultant until the end of 2016.

In recent years, the apparel industry has been hard hit with more shoppers moving online to make their purchases and spending less time at shopping malls and stores.

Consequently, VF Corp. had seen declining revenues for the three labels it sold to Delta Galil. In 2015, VF Corp. reported that the combined revenues for the three brands was a little more than $300 million.

VF Corp. purchased 7 For All Mankind for $775 million in 2007 when the premium-denim trend was popular among consumers.

VF Corp. was a one-third owner in Mo Industries, the parent company of Splendid and Ella Moss, before it acquired the other two-thirds in 2009 for $161 million plus $47 million in debt.

Delta Galil, established in 1975 and with revenues of more than $1.1 billion a year, likes to find modern brands and figure out how to grow them. Two years ago, it purchased P.J. Salvage, a lingerie and lounge-wear label based in Irvine, Calif.

Its other brands include Karen Neuberger, Schiesser, LittleMissMatched and Fix.