Crains New York - July 16, 2012 - (Page 4)

Warnaco in the deep end Counts on Olympics for boost, but jazzy swimwear unlikely to reverse sales dive BY ADRIANNE PASQUARELLI When Michael Phelps dives into the pool at next week’s Olympic Games, more will be riding on his swimming than a gold medal. Warnaco Group Inc., the Manhattan-based licensee of Speedo USA, could use a push from the brand’s new Fastskin3 suit, cap and goggles, which will be worn by athletes including Mr. Phelps and Ryan Lochte. “It’s an Olympic year, and we’re looking forward to leveraging that excitement,” said Warnaco Chief Executive Helen McCluskey during a recent earnings conference call. She noted that the company wants to make a splash with the “broader swim community” by offering a new line of Speedo deckwear and team apparel. co to announce last week that it will But swimwear is just a drop in likely restructure its Europeanthe bucket for $2.5 billion-revbased business. The company reenue Warnaco,and the clothcently lost the license for its “ck ier will need more than Calvin Klein” brand of apparlatex swim caps to reel and accessories in Europe verse plummeting after failing to meet minisales. The company, mum sales requirements which also sells put forth by Calvin Calvin Klein Klein Inc.,the company OLYMPIC TEAM: jeans and underthat licenses the brand. Warnaco CEO wear, reported Consumers have Helen McCluskey and Michael that overall revabandoned Calvin Phelps. enue fell 7% in Klein products, which 12 months, to analysts say have be$615.5 million come less trendy and for the quarter less well made as Warended March 31. naco has grappled with Earnings were last year’s dramatic rise in down 18.4%, to cotton costs. Meanwhile, $35.9 million, for competitors such as Tomthe same period. my Hilfiger, which is The problem is owned by Phillips-Van even worse in fiHeusen Corp., and nancially fraught Guess are grabbing marEurope, where revket share. enue dropped 13% “Warnaco had denfor the period, im and underwear— newscom See WARNACO on Page 24 prompting Warna- IN THE MARKETS by Lisa Fickenscher CHEESE WHIZ: CEO Daniel Dowe borrows page from crowdfunding book to fund big expansion. Artisanal penny-stock firm has bold dreams of Krafty future A rtisanal Brands Inc. may be a penny stock, trading at about 15 cents a share, but its chief executive has grand ambitions for the premium cheese-maker. He plans to turn it into a blue-chip company one day—in the mold of his corporate idol, Kraft Foods Inc. To make that leap, the company founded nine years ago by celebrity chef Terrance Brennan is ramping up, starting with a capital funding effort launched last month designed to raise $8 million. “We want to be known as the specialty cheese brand, similar to what Kraft did for mainstream cheese,” said lion by selling shares directly to the public.It was recently signed into law by President Barack Obama. “The legislation planted a seed in my head,” said Mr. Dowe, who registered with the Securities and Exchange Commission in April and received approval just two months later. Previously, Artisanal could sell only to institutional investors or very-high-net-worth individuals. Now Mr. Dowe is preparing to sell stock—and a bit more. For $500, he will offer buyers membership in Artisanal’s new Owners’ Club, which will entitle them to 1,000 Artisanal shares plus perks, including quarterly deliveries of rare cheeses. In a further boost for the company, he has just inked deals with two big corporate clients. Starting in September, Hyatt Hotels and Resorts will serve Artisanal’s American cheeses in up to 100 of its properties as part of its effort to source more of its food locally. Meanwhile, starting next month Food Emporium and A&P will devote a section in the cheese departments of up to 50 stores to Artisanalbranded products. Daniel Dowe, Artisanal’s CEO. In 2007, he bought the company with a group of investors from Mr.Brennan for $4 million using a shell company, and then took the company public. Today, Artisanal sells 70 cheeses from 40 providers—ranging from Humboldt Fog, made in California with goat’s milk, to Brillat-Savarin, a triple-crème brie-style cheese from France. Its customers range from food markets to hotels and restaurants. Over the next four months, Mr. Dowe plans to expand his menu of offerings to 300 types of cheese from 175 providers, the vast majority of which will be from American producers, making Artisanal the largest distributor of American specialty cheeses. Funding the planned $8 million expansion is the hard part. The firm has yet to turn an annual profit, and its revenue in the fiscal year ended May 31 was a mere $4.5 million.Not surprisingly, bank lenders and institutional investors have both given thumbs-down on requests for cash. In response, Mr. Dowe said he has drawn inspiration from the Crowdfund Act, which allows small businesses to raise as much as $1 mil- istockphoto +1.7% AFTER SIX STRAIGHT DAYS OF LOSSES, the Bloomberg/ Crain’s index of New York-area stocks actually posted a solid gain Friday, powered by rebounding bank shares. 4 | Crain’s New York Business | July 16, 2012 buck ennis http://www.panynj.gov/supplierdiversity http://www.panynj.gov/supplierdiversity

Table of Contents for the Digital Edition of Crains New York - July 16, 2012

Crains New York - July 16, 2012
In the Boroughs
In the Markets
The Insider
Business Peopl
From Around the City
Opinion
Greg David
Real Estate Deals
Report: Small Business
For the Record
Classifieds
Source Lunch
Out and About
Snaps

Crains New York - July 16, 2012