Kellwood is taking on Hollywould.
Two months after acquiring Vince, Kellwood Co. has acquired another niche, upscale contemporary brand Hollywould Inc. Terms of the deal were not disclosed.
“This is a neat little emerging brand that hopefully we can build into something big,” said Robert C. Skinner Jr., chairman, president and chief executive officer of Kellwood. “The growth potential would be exponential.”
Founded by creative director Holly Dunlap in 1999 as a luxury footwear line, today the brand includes a limited amount of apparel and other accessories. Positioned at accessible designer price points, Hollywould is sold at Bergdorf Goodman, Neiman Marcus, Nordstrom, specialty stores and its own boutiques in Palm Beach and in Manhattan’s NoLIta neighborhood.
Based in New York, Dunlap and her team will stay on to lead the business, which will operate as a stand-alone unit within Kellwood.
“I will continue on in my role, which has been creative director/ceo, but the second part I will no longer have, which makes me very happy,” Dunlap said. “Kellwood will take care of the financial part, which will give me more time to design.”
Dunlap added she wants to make Hollywould a full lifestyle brand, “with everything under the sun,” over the next decade and could grow up to 100-fold. All parties declined comment on existing sales for the line.
“It’s a bet,” said Brad A. Stephens, an analyst at Morgan Keegan & Co. Inc. “If Kellwood continues to make small deals like this and a couple of them can take off, it’s a home run, and if it doesn’t take off, they didn’t lose too much in the investment.”
Eventually, Dunlap wants the collection to include lingerie, eyewear, denim, swimwear and even perfume, but in the short term, she plans to focus on expanding the existing product categories, particularly the handbags and ready-to-wear component, which she said she has not had enough time to develop fully while running the business.
Retail is another opportunity for expansion. Dunlap wants to open at least two, if not four, stores in 2007, beginning in Los Angeles, and ultimately expanding to San Francisco, Dallas, Atlanta, Las Vegas and uptown Manhattan.
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Skinner admitted the deal will not “move the needle” for the $1.9 billion St. Louis-based firm but said upscale acquisitions like this — ranging from niche to huge in size — will continue to be Kellwood’s strategy as it transitions from a predominately moderate manufacturer to a more branded, upscale vendor.
This move follows its deal in late September to acquire CRL Group LLC, owner of the brand and trademark for Vince, the Southern California-based women’s contemporary collection, also for an undisclosed sum. Vince is expected to generate sales of $45 million this year.
Financo Inc. represented Kellwood in the Hollywould deal.