Kellwood: A share price in tatters

Shares of apparel maker Kellwood Co. (NYSE: KWD) have been in tatters in recent months. More than anything, the St. Louis company behind such diverse labels as Sag Harbor, Gerber, Liz Claiborne and Phat Farm has suffered more from industry conditions than from execution of its business strategies.
 
Outside of the retail sector, few consumers would recognize Kellwood as the apparel powerhouse behind a laundry list of brands that it either owns or controls through licensing agreements. It has grown over its 46-year existence to become a company with $2 billion in annual sales, yet it remains a small-cap stock to own, with a market capitalization of about $505 million after Wednesday’s dip to a new 52-week low. 
 
Retailing is in the throes of big changes, and Kellwood is tangled up in them. Wal-Mart Stores Inc. (NYSE: WMT) has been trying to shore up its bottom line. Macy’s Inc. (NYSE: M) has struggled to absorb another St. Louis company, the former May Department Stores, which has resulted in store reductions – and fewer places to sell the Kellwood brands. During the fiscal year ended February 3, Wal-Mart accounted for 12% and Kohl's Corp. (NYSE: KSS) accounted for 11% of Kellwood’s net sales.

The retail turmoil has triggered a restructuring at Kellwood, including a facilities retrenchment and an executive shuffle. Controller and VP of finance Gregory Kleffner has taken over as chief financial officer, a title relinquished by W. Lee Capps III so that he can focus more on operations as chief operating officer.

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