California Apparel News

After nearly 25 years in business, Three Dots, a contemporary knit tops and womenswear company launched in 1995 by Sharon Lebon, has ceased operations.

Calls to Lebon, the company’s chief executive and president, and to Bruno Lebon, the company’s vice president, were not answered, and emails to sales representatives bounced back as undeliverable.

Sources said the company, based in Garden Grove, Calif., shut its doors on April 18, right before the Easter weekend, while sales reps were out on the road selling the label’s knit tops and fashion collection. “They were desperate for cash to go forward,” one source said.

As recently as mid-April, a sales representative was selling the label’s collection at the Fashion Market Northern California trade show, held five times a year in San Mateo, Calif.

It was unclear how many employees were laid off. As of this week, the company’s owners were selling the venture’s manufacturing equipment, one source said.

Three Dots started out small, but by 2006 its revenues had reached $26 million, according to published reports, but last year revenues were down to $12 million, sources said.

By the middle of the week, Three Dots had not filed any documents with the U.S. Bankruptcy Court but was planning to meet with an investor who might be interested in buying the trademark.

The company has been trying to sell its venture over the past few years. Earlier this year, sources said Three Dots’ owners met with Chinese investors to try to sell the company, but the deal fell through after the Chinese company pulled out.

“It has been harder for contemporary clothing companies to stay in business because there are fewer multi-line stores to sell to and there is not a lot of floor space in the bigger department stores,” said Mark Brutzkus, a bankruptcy attorney at Brutzkus Gubner Rozansky Seror Weber, who often works with apparel-industry clients. “So unless you are doing a lot of direct-to-consumer business, it is tough to make it as a contemporary brand.”

It is hard to keep a brand alive, which is why there are so many brand-management companies out there snapping up faded brands. Iconix Brand Group in New York has acquired several veteran California labels, which include OP, Bongo, Ed Hardy, Mossimo and Rampage as well as national labels including London Fog, Fieldcrest and Buffalo David Bitton.

Sequential Brands Group, also in New York, has bought a stable of California labels including Joe’s Jeans, Jessica Simpson and William Rast as well as Ellen Tracy, Martha Stewart and Caribbean Joe.

“All brands have life cycles of their own. A few brands can last a lifetime or more such as Levi’s, but most have a limited life,” said Rob Greenspan, the president of Greenspan Consult, which works with a number of apparel companies. “Most contemporary brands fall into the category of a limited life span due to the nature of rapidly changing fashion trends and the ability to stay ahead of the fashion curve. Oftentimes the brand is led by a single person, usually the owner/designer, and therein lies a significant issue. It is incumbent upon that person’s vision to keep the brand moving forward. Brands that have a ‘team of people with a transition strategy’ to keep pace ahead of the fashion trends have a chance for a longer life cycle.”

Sharon Lebon and her now-former business partner, John Ward, founded Three Dots in the mid-’90s with the idea of making fabulously fitted T-shirts and contemporary tops with quality fabric and great design. For many years, the company’s collection of tops was made at the company’s headquarters, located in a 70,000-square-foot building in an industrial park in Garden Grove. Later, some of that production was contracted to sewing factories in the Los Angeles area as Three Dots branched out into dresses and other lifestyle items.

At one time, the company’s collection was selling at 2,000 specialty boutiques and in stores in Europe, Asia, Canada and Australia.

The company also had a handful of its own stores in areas such as Newport Beach, Calif., and in Tokyo. Those have been closed. Three Dots is still a popular seller at high-end department stores including Bloomingdale’s, where a ribbed turtleneck is listed online for $66, a long-sleeved crew-neck T-shirt is going for $48, and a striped-gauze tie-front top is selling for $134.

In 2016, the company launched its first plus-size collection, which initially was being sold at Nordstrom as it tried to generate new revenue streams.