Kellwood Co. is eliminating David Meister sportswear after this spring.
The bridge brand, headquartered in Los Angeles, will focus on its dress collection, which makes up the majority of the line’s sales, according to a Kellwood spokeswoman.
“We are discontinuing the sportswear business to intensify our efforts in the dress business,” she said. “Dresses are really David’s strength, and that business is on fire right now.”
While working at Kellwood, Meister began his eponymous brand at the $1.9 billion vendor in 1999. The brand added sportswear in 2004. By 2005, dresses accounted for 55 percent of what was a $30 million wholesale business at the time, carried in 400 U.S. doors, including Saks Fifth Avenue, Nordstrom and Neiman Marcus. But dresses make up a far larger percentage today, and sportswear is “insignificant,” according to Kellwood.
“It is a good brand in the dress category, and dresses are a stronger fashion cycle currently,” said Elizabeth Montgomery, analyst for Cowen & Co. “The sportswear component for that age of customers is not growing as quickly. The brand was competing with Ellen Tracy, Dana Buchman and Anne Klein without the name recognition or big advertising budget.”
Although analysts are viewing the move as positive to the extent that the closing indicates Kellwood is cutting losses on a money-losing venture, the move also sends up red flags that an owned, bridge-level business is being cut back.
“If the whole story is that Kellwood is transitioning from a moderate company to a better and above company, we have to question how that transformation is going,” said Brad Stephens, an analyst for Morgan Keegan & Co. Inc. “To succeed today you need to be a company with a proficiency in better products.”