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Frederick’s: Hollywood Sizzle Line
Frederick’s: Hollywood Sizzle Line

Added: May 2010

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current news

Frederick’s To Leave Wholesale

(Filed Under Fashion News). After several quarters of losing wholesale revenue, Frederick’s of Hollywood Group is trying to sell this side of its business. The company has hired Avalon Group, an investment banking firm, to identify “strategic alternatives” for Movie Star, the wholesale division, which it merged with in 2008.

“By selling the wholesale division, we can focus more of our resources on strengthening our retail division and expanding into new product categories through strategic domestic and international licensing agreements for the Frederick’s of Hollywood brand,” Thomas Lynch, chairman and C.E.O of Frederick’s of Hollywood, said. “Considering Movie Star’s history, broad product lines and extensive customer list of retailers, we are confident in our ability to identify an appropriate buyer for the business.”

The Moviestar division has been the primary driving force behind Frederick’s difficulty pulling in sales, according to the company’s recent financial reports. Despite a modest return to profit during the third quarter ended April 24, 2010, which the company reported in June, wholesale segment sales dropped 11.7 percent, accounting for 25.5 percent of the company’s 7.2 percent net sales decrease. During the most recent second quarter, wholesale sales plunged 67.7 percent, accounting for 86 percent of the company’s 21.3 percent sales decrease.

This news came after Frederick’s announced in August that it is outsourcing its remaining manufacturing facilities and consolidating its distribution facilities in a cost-cutting effort.

more Fashion News >>

Published 09-17-2010 by Amanda Torres Price

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