By SUZANNE KAPNER New York Post
Fashion designer John Varvatos and the VF Corp. have formed a new company, John Varvatos Enterprises, ending two years of uncertainty over the future of the designer's brand, executives involved in the deal said yesterday.
Varvatos will own one-fifth of the company; VF will own the rest. The exact terms of the transaction weren't disclosed.
The designer has spent the better part of the past two years talking to suitors after his company's former parent, Nautica Enterprises, was acquired by VF in March 2003. "When I'd done all my homework," Varvatos said yesterday, at his Chelsea studio, "I realized I had the best thing in my backyard."
The pairing of Varvatos, whose suits sell for thousands of dollars, and VF, the company known for everyman's Wrangler and Lee jeans, may seem like an odd combination.
Eric Wiseman, who oversees VF's outdoor and sportswear divisions, yesterday admitted that the match wasn't an obvious one.
"VF doesn't have brands in luxury menswear," and isn't likely to acquire more, Wiseman said. But, he said, working with Varvatos convinced him of the brand's potential.
Sources place John Varvatos company's annual revenue at roughly $25 million, from the sale of men's and women's clothing, and licensing deals for fragrances, skin care and sneakers.
But in a sign of how difficult it can be to earn money in the rarified world of designer clothing, the business is said to lose about $4 million a year, perhaps providing an opening for VF, with its international sourcing network, to run the company more efficiently.
As a sign of the designer's popular appeal, Wiseman pointed to the line of laceless, canvas sneakers that Varvatos created for Converse. All 60,000 pairs quickly sold out of stores, and Varvatos is now due to design a line of clothing under Converse's Chuck Taylor name, due in stores for fall 2006.
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