HAMPSHIRE GROUP, LIMITED
(FORMER NYSE @ $27+)
ASSETS $45,000,000 & REVENUES $65,000,000
Over $100,000,000 Combined ASSETS/REVENUES @ $0.065
O/S 8,795,530 Based on September 26, 2015
FLOAT 842,722 Based on 2014 10-K
INSIDER/INSTITUTIONAL HOLDERS 7,926,501 Based on 2014 10-K
PAR VALUE $0.10
DOCKERS BRAND VIDEO
JAMES CAMPBELL BRAND VIDEO
J.C. PENNY, KOHL'S, SEARS
Hampshire Group, Limited along with its wholly-owned subsidiary, Hampshire Brands, Inc. is a provider of fashion apparel across a broad range of product categories, channels of distribution and price points. The Company specializes in designing and marketing men's sportswear to department stores, chain stores and mass market retailers under licensed brands, our own proprietary brands and the private labels of our customers. Brands include Dockers® (men's tops & sweaters, and women's tops & bottoms) and James Campbell (men's shirts & blazers). We have a robust design, sourcing, procurement, delivery, and logistics infrastructure. This infrastructure enables us to deliver quality products within a given price range, respond quickly to changing fashion trends, and provide high-level customer service. As a result, our products often outsell competitors' while delivering better profitability to our retail customers.
Our Business and Products
We have a long history of supplying men’s branded and private label apparel to department stores and national chains throughout the United States. We utilize our own sales force and contract third-party salespersons to sell our products. With our established international sourcing relationships, we have the ability to respond quickly to changing fashion trends. The emphasis with every garment we offer is a compelling product that features high quality and good value. The ongoing diversification and expansion of our product offerings allows us to participate in a range of retail price points from “main floor” traditional styles to fashion forward designer styles. We have continued to enhance and diversify our product lines in 2014.
Hampshire Brands designs and markets men’s sportswear to department stores, chain stores and mass market retailers under licensed brands. We offer a full tops assortment under the Dockers® brand. Under our multi-year licensing agreement with Dockers® for its men’s “good” category tops in the United States, and with respect to sweaters, Central and South America also, we oversee the design, production, sales and distribution of the line to certain chain and department stores including Kohl’s Department Stores, Inc., J.C. Penney Company, Inc. and Sears Holding Corporation. The woven and knit line includes button down shirts, polos, fleece tops and t-shirts, and we believe that these categories complement and strengthen the marketability of our Dockers® sweater offering and, taken together, help to ensure we have a compelling international brand to offer to retailers.
In 2014, we entered into license agreements with Levis Strauss & Co. for its Dockers® brand. The agreements provide us with, among other things, the licensing rights to design, source, market and service the women's category for both tops and bottoms beginning with the Spring 2015 season in the United States and extends to Mexico and Canada for Fall 2015. Each of these agreements, as amended, runs through November 2017. For additional information, see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations .
Our strategies for the future include leveraging our strengths:
Experienced Design and Sourcing Capabilities . We have and continue to invest in high-quality design talent and resources. Our investments are aimed at further strengthening our design and sourcing efficiencies to ensure our brands fulfill the demand for high-quality, value and trend-right products.
Strong Competitive Position . As our retail customers seek to differentiate their assortments from competitors, they are increasingly turning to select designer and exclusive labels. We have demonstrated our value to retailers by offering a well-known licensed Dockers® brand and our new James Campbell brand.
Continued Improvement of our Infrastructure. As efficient systems and technologies are critical to meeting our retail customers’ needs, we are constantly re-evaluating our infrastructure to obtain additional synergies and efficiencies. During 2014, through our reorganizational plan, we scaled our organization, operations and expenses to better support our business model and sales levels.
Growth Opportunities in Existing and New Channels . We are focused both on growing our sales to retailers in the moderate department, better department stores, chain and specialty stores, as well as actively exploring new sales channels including international, vertical specialty stores and direct-to-consumer.
We have long-term relationships with many of our customers. Hampshire Brands sells products principally into the moderate price sector of most major department and chain stores in the United States. Rio sold primarily to the vertical specialty store channel, and most of our sales to Aeropostale, Inc. were Rio products. Sales to our three largest customers in 2014, Aeropostale, Inc., Kohl’s Department Stores, Inc. and J.C. Penney Company, Inc. represented 40%, 17% and 14%, respectively, of our net sales. These same three customers represented 50%, 13% and 11%, respectively, of our net sales during 2013. For 2014 and 2013, more than 97% and 99%, respectively, of our net sales from continuing operations were to customers located in the United States. We expect that we will have little or no sales to Aeropostale after the Rio sale. We believe that revenues from James Campbell, acquired in February 2014, and Dockers women’s apparel, which we will begin selling in the Spring of 2015, will partially offset the loss of sales to Aeropostale.
Our Suppliers and Manufacturers
Hampshire Brands primarily uses foreign suppliers for its raw materials and product manufacturing. During 2014, the majority of our products were produced by independent manufacturers located in Southeast Asia. Keynote Services, Limited, our subsidiary based in China, assists with our sourcing needs and provides quality control.
Thomas J. Doyle (director as of January 2015)
Mr. Doyle brings more than 35 years of corporate financial and management experience to Hampshire, including 28 years across various divisions within Citigroup. Most recently, Mr. Doyle served as Executive Vice President and Regional Chief Credit Officer at Citigroup. Prior to that, he held managerial positions within the bank's Global Portfolio Management, Corporate Finance, Acquisition Finance, and Institutional Recovery Management units. Earlier in his career, Mr. Doyle served as a Marketing and Credit Officer with Bankers Trust Company. Mr. Doyle retired from Citigroup in 2008. He currently serves as Treasurer on the Board of Directors at the Great Bay Condominium Owners Association - Ritz Carlton Club, St. Thomas.
Brett Fialkoff (director as of January 2015)
Mr. Fialkoff is currently Chief Operating Officer at Haskell Jewels, LLC, a leading designer, marketer and distributor of costume jewelry and watches. Since 2008 he has also served as Head of Finance, Strategy, International, and Distribution for Haskell Jewels. Previously, Mr. Fialkoff was a founder and president of P2 Management, LLC, the management company for the Performance Partners, LP and Performance Partners LTD investment funds. Prior to founding P2 Management in 2003, he was a Managing Director at Performance Capital, LLC. Mr. Fialkoff is currently a Board Member of the Accessories Council and a Board of Advisors Member at Adaptive Sports Center. He was previously on the Board of Directors at Regent Energy and Sentigen Holdings.
Paul M. Buxbuam (director since 2011)
Mr. Buxbaum is the Chairman and CEO of Buxbaum Group and has been a partner in Buxbaum Group and its related and successor companies for over 25 years. Mr. Buxbaum has served on the Board and\or as an officer of various public and private companies such as CEO of Global Health Sciences, chairman of the board of Ames Department Stores, board member of Herbalife International, Richman-Gordman "Half-Price" Stores, Lamont's Apparel, and Jay Jacobs. Mr. Buxbaum was the majority equity owner of Rio Garment and served as Chief Executive Officer and a board member of Haggar Clothing Company from March 2009 until April 2012.
Benjamin C. Yogel (director since 2011)
Mr. Yogel is the Managing Partner and founder of MRC Capital Group. Mr. Yogel has played an integral role as part of deal teams executing leveraged buyout transactions, portfolio company sales, strategic acquisitions for portfolio companies, leveraged recapitalizations, and going-private transactions. Mr. Yogel currently sits on the Board of Directors of Buxbaum Jewelry Advisors, LLC and is the Chairman of the Board of Directors of Frontera Investment, Inc. (OTC: FRNV).
Paul Buxbaum is Chairman, President & Chief Executive Officer of Hampshire Group, Limited. Mr. Buxbaum was appointed to the role in January 2013 and is responsible for the overall management and strategic direction of the Company. Mr. Buxbaum has served as a director of the Company since August 2011. Mr. Buxbaum is the Chairman and CEO of Buxbaum Group and has been a partner in Buxbaum Group and its related and successor companies for over 25 years. Mr. Buxbaum has served on the Board and/or as an officer of various public and private companies covering many facets of the retail industry. Such appointments included CEO of Global Health Sciences, chairman of the board of Ames Department Stores, board member of Herbalife International, Richman-Gordman "Half-Price" Stores, Lamont's Apparel, Jay Jacobs and Seven For All Mankind. Mr. Buxbaum was the majority equity owner of Rio Garment and served as Chief Executive Officer and a board member of Haggar Clothing Company from March 2009 until April 2012. In 2003, Mr. Buxbaum purchased a one-half interest in, and oversaw the operational reorganization of, Rampage Clothing, which was subsequently sold to Iconix Brand Group.
David Price is Chief Operating Officer of Hampshire Group, Limited. Mr. Price was appointed COO in March 2014 after serving as Senior Vice President of Operations since 2012. He has over 25 years of industry experience in manufacturing, merchandising, distribution, sourcing/procurement and operations. Prior to joining Hampshire, Mr. Price was Senior Vice President of Operations for Haggar Clothing, and previously held senior management positions with Aramark Uniform Services, Cintas, Wrangler (VF Corp).
Mr. Drozdowski brings more than 25 years of financial and operational experience to Hampshire. Since 2006, he has served as interim Chief Financial Officer and/or Financial Advisor for thirteen of GRL Capital Advisors' clients in the retail, wholesale, manufacturing and distribution industries, among others. Prior to joining GRL, Mr. Drozdowski was financial controller with Urban Brands, a leading women's specialty retailer with stores across the United States, Puerto Rico and the U.S. Virgin Islands. Before that he was the Director of Finance at Petrie Retail Inc., a major retailer of women's apparel that operated stores under a variety of names, including Petrie's, Winkelman's, Stuarts, M.J. Carroll, Rave, and G&G. Earlier in his career, Mr. Drozdowski served as Controller for Petrie Stores Corp.