You'll find Perry Ellis International (PEI) apparel worn about town during the workweek and on the links most weekends. It designs, distributes, and licenses men's and women's sportswear under some 30 company-owned or licensed brands, including Jantzen, Laundry, Manhattan, Munsingwear, Original Penguin, and namesake Perry Ellis, among others. PEI also distributes PGA and Champions Tour golf apparel and NIKE swimwear under licenses. PEI's customers include some of the nation's largest retailers (Wal-Mart, Dillard's, and Macy's) and it distributes its products to some 15,000 stores. The apparel maker also operates more than 40 Perry Ellis stores in the US and Puerto Rico and about 10 Original Penguin US shops.
The retailer's 2010 sales slid about 12% from 2009's levels due, in part, to the global recession. PEI saw two of its former customers -- Mervyns and Goody's -- file for bankruptcy and subsequently liquidate their businesses. To compound the problem, the apparel maker lost its PING and Dockers Outdoors licensing agreements and some specialty store programs. While consumer demand has been weak, PEI in 2010 logged organic growth within its golf lifestyle business and among several brands, including John Henry and Laundry by Shelli Segal.
PEI is a diversified company with a vast products portfolio, which it peddles through multiple distribution channels (from mass merchants to luxury stores and specialty shops). The company generates most of its revenue from wholesale sales, which represented 97% of its business in fiscal 2010. Of this segment, some 86% came from the sale of men's sportswear; men's and women's swimwear sales accounted for the balance. PEI is looking to boost business in its direct-to-consumer channel, which includes retail stores and e-commerce revenue, for all of its brands worldwide. To this end, PEI in early 2011 bought women's sportswear maker Rafaella Apparel Group for about $80 million. Acquiring the Rafaella business allows PEI to diversify its business model and expand its existing women's brands: Laundry by Shelli Segal and C&C California.
To build its women's business, PEI acquired the Laundry By Design and C&C California brands in 2008 from Liz Claiborne. (Laundry is a key dress brand for major retailers such as Saks, Bloomingdale's, Nordstrom, and Neiman Marcus, while C&C is a contemporary brand for missies and juniors.) Soon after, PEI combined the pair of acquired brands with its Original Penguin brand to form a Contemporary Business platform.
In recent years, the apparel company has sought to further diversify by seeking out new markets overseas. To broadcast its name worldwide, PEI inked a licensing deal with South Pacific Apparel, which makes and markets Savane- and Farah-branded pants and shorts for men and boys in Australia, New Zealand, and elsewhere in the South Pacific region. Also, it has added several licensing deals to sell clothes in South Korea, Japan, and Vietnam.
Licensing agreements accounted for a mere 3% of PEI's 2010 revenue. Looking to make itself a mainstay in the apparel arena, PEI licenses its name to third parties -- a strategy many fashion houses have moved away from. Despite this, the company continues to license its name, citing that the effort elevates the overall awareness of its brands without much investment.
PEI's apparel is made by Asian and Central American contractors and sold by retailers in the US, Canada, the UK, Europe, and Puerto Rico. The company's largest customers are Kohl's and Macy's, which accounted for 20% and 11% of 2010 sales, respectively.
The founding Feldenkreis family owns about 29% of the company, which it also runs.