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Wednesday, May 25, 2022

Apparel Companies Not Worn Out Yet

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Apparel companies enjoyed increased in-store traffic last year as lockdown lifts opened the floodgates for in-person shoppers.

Many local retailers have surpassed pre-pandemic numbers, some have plans to go public, while others saw notable executive changes.

Challenges aren’t fully in the rear-view mirror though, as firms still wait out supply chain backlogs and shake off lingering impacts of the pandemic.

Over the past year, apparel payrolls locally grew nearly 2% to more than 8,000 workers, according to this week’s Business Journal’s annual Apparel Cos. list.

Public Plans

Local retailer and tactical gear maker 5.11 Inc. filed for an initial public offering in November, with plans to raise $100 million. The company has since postponed the offering due to a choppy IPO market.

The company is still in growth mode.

5.11 signed a deal in March to move its headquarters from Irvine to a larger, 40,000-square-foot space at the Canvas office campus in Costa Mesa alongside the San Diego (405) Freeway near Bristol Avenue.

In other public company news, the parent company of Irvine luxury knit house St. John Knits International Inc. is looking to go public via a reverse merger.

Shanghai-based parent company Lanvin Group said in late March it plans to go public via a special purpose acquisition company, or SPAC, Primavera Capital Acquisition Corp. (NYSE: PV).

Lanvin Group is looking to raise $544 million in the deal, which would value the firm around $1.5 billion. Shares for the company would be listed on the NYSE under the “LANV” ticker symbol. A timeline for the deal’s completion hasn’t been disclosed.

“It’s a momentous moment for Lanvin Group and we are excited for their path to become publicly traded. Being part of a global luxury fashion group will only benefit St. John as we move into our 60th anniversary of business in Southern California,” Deputy CEO Andy Lew told the Business Journal last month.

Lew took on the CEO role at St. John after Eran Cohen left the company last year. The company’s sales for fiscal 2021 totaled $82 million, up 12% from the year prior.

New Vans Exec

St. John isn’t the only company with a new exec.

In March, the parent company of Vans Inc. said it appointed Kevin Bailey as the global brand president of the Costa Mesa footwear company, which reported $1 billion in revenue for the last quarter of 2021.

It’s a return to the Vans brand for Bailey, who served as the company’s VP of retail when VF Corp. (NYSE: VFC) acquired Vans in 2004. Three years later, Bailey became the president of Vans and served until 2016.

Bailey replaces Doug Palladini, who served as the global president of Vans since 2016.

In-Store Boom

Apparel companies already on the stock market continue to enjoy gains.

For the first three quarters of 2021, Irvine-based Boot Barn Holdings Inc. (NYSE: BOOT) performed “greater than any full-year period in the company’s history,” President and CEO Jim Conroy said in a recent press release.

Sales for the nine-month period ended Dec. 25 grew to $1.1 billion, up 74% from the year prior.

Conroy attributes much of the sales growth to the company’s new customers, many of whom flocked to physical stores after the company invested in traditional marketing programs, such as radio, television and direct mail, Conroy told analysts in a conference call in January.

The company reported a nearly 56% increase in retail store sales and 48% increase in e-commerce sales from the year prior.

What’s more, “a strong portion of [the company’s sales growth] can [also] be attributed to the work done by the merchandising team in managing the challenges of the supply chain to ensure healthy in-stock positions … and bolstering our legacy offerings,” Conroy said.

While Conroy notes the apparel industry is showing “modest growth,” he recognizes his company is a standout: “we are really showing outsized growth.”

Like Boot Barn, Tilly’s Inc. (NYSE: TLYS) of Irvine saw record earnings in its latest report, despite struggling with ongoing supply chain backlogs.

“Fiscal 2021 was our most profitable year ever,” CEO Ed Thomas told analysts in a conference call in March.

The company saw a notable increase in in-person shoppers last year, which will factor into the firm’s 2022 plans, when it expects to open at least 15 new locations.

“The positive momentum in our business for the past five quarters continued into the early part of the first quarter of fiscal 2022,” Thomas said. 

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