By design: Miami-based Perry Ellis International has just had a record quarter, surpassing $100 million in sales. Next for CEO George Feldenkreis? Making Miami a fashion capital - Apparel

South Florida CEO,  July, 2003  by J.P. Faber

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Don't tell George Feldenkreis that retail is slow. He won't believe you. Neither will retailers who placed orders this year from swimwear from Perry Ellis family brand-names like, Tommy Hilfiger and Jantze. Collectively, they gave the firm its best first quarter ever.

A big boost for the record $101.9 million In sales came from last year's acquisition of the Jantzen swimwear line. Feldenkreis has a penchant for energizing famous brands that have slightly faded, and Jantzen is no exception. "The future of the business is being in brands," says Feldenkreis, 67, in his corner office at Perry Ellis International's headquarters west of Miami International Airport. "Apparel companies that don't have brands that retailers want to carry are going to be extinct."

Once a retailer of guayabera shirts, then a manufacturer of the same, Feldenkreis has practiced what he preaches. In the decade since he took his company public, Feldenkreis has acquired more than two dozen clothing brands, either outright or through licensing. One early, powerful acquisition came in 1996, when the company, then known as Supreme International, took over Munsingwear, known for its Penguin golf shirts. That $18 million deal went so well that Supreme made it to the Forbes 1997 list of the 200 best small companies in the US.

Feldenkreis' landmark deal was the 1999 acquisition of the Perry Ellis brand for $75 million. Considered one of the top trademarks in the world, its recognition was so strong that Feldenkreis changed the name of his company to reflect it.

This year, Feldenkreis is taking another expansionary leap, via a $91 million deal to take over the Salant retail chain. The 39 retail stores owned by Salant should add another $170 million in annual revenues, while Salant's licenses for other brands, including Ocean Pacific, are expected to add $80 million to the top line.

Even without the Salant buy, Perry Ellis did $306 million in sales last year, with a net income of $10.8 million, up from $277 million in 2001 sales, with a net income of $6.6 million. Those results were buoyed by a strong fourth quarter, up 51.3 percent from 2001, followed by this year's record first quarter. "Fundamentally, it looks like the company has seen a great upturn over the last two quarters," says Kenneth Gruneisen, a stock analyst with Source Capital Group, in Lighthouse Point. "It looks like the stock has explosive potential." Currently trading at around $21 a share, the stock (Nasdaq: PERY) is at a five-year peak.

Reflecting the importance of that ticker price, earlier this summer Feldenkreis celebrated the tenth anniversary of going public at the Nasdaq in New York, pushing the button to start the day's trading. "It was really very moving," he says.

While much of Perry Ellis' business is linked to New York--company president Oscar Feldenkreis, George's son, must constantly travel there for sales to national retail chains--the CEO is increasingly concerned with Miami's status asa fashion capital of the Americas. Among the company's 400 employees in Miami are 40 fashion designers. They, along with 20 designers in New York, 20 in Europe and 16 in Oregon, are responsible for the look of the brands which Perry Ellis owns and licenses. Feldenkreis would like to see more design emanating from Miami, and a stronger presence for the industry here.

"I think South Florida should have a lot to offer the fashion industry," he says. "We should be producing more designers." But for the business to flower here, he says, there must be a concerted effort by local government to attract apparel companies. There must also be an effort by the major universities to create curriculum in "understanding textiles, fashion, logistics, and salesmanship" as it relates to the industry. Currently, there is only the Miami International University of Art & Design, from which Perry Ellis recruits.

In the meantime, Feldenkreis will be doing his part, growing Perry Ellis International into an ever greater force in the global fashion world. When asked where he wants to take his company in the next few years, he replies: "Well, I've always said that we want to be a billion dollar company. After that, I'll think about it."

COPYRIGHT 2003 Americas Publishing Group
COPYRIGHT 2003 Gale Group