Women’s Wear Daily
04.18.2014
business-features
business-features

Arthur S. Levine's Business Lessons

Having run multimillion-dollar companies for many years in the fashion world, the ceo of Tahari ASL has developed a simple philosophy for success.

business-features/news
Elie Tahari Arthur S Levine

Arthur S. Levine has run multimillion-dollar companies for many years in the often-complicated fashion world, but has developed a simple philosophy for success.

“The only thing that matters is the product,” Levine said in a phone interview, when asked about the key lessons learned in his 50-year career. “And there’s no substitute for quality and look.”

As a partner and chief executive officer of Tahari ASL, which includes the Tahari Arthur S. Levine brand of suits and dresses, as well as a private-label division, Levine’s legacy on Seventh Avenue is deep, established as the longtime ceo and chairman of Kasper ASL and principal and ceo of Anne Klein. Levine, who was also owner and ceo of the fabled Bobbie Brooks company in the late Sixties and early Seventies, recalled that while the partnership with Elie Tahari was a long time in formation, it hit a formidable obstacle out of the starting gate.

That’s because Levine and Tahari started the Tahari ASL business on Sept. 10, 2001, the day before the Sept. 11 attacks, so it was a precarious time to begin a new endeavor.

“Elie really pushed me on, he was my biggest cheerleader,” Levine said. “It has turned out to be a very successful venture and an exciting 12 years.”

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Levine said he has known Tahari for nearly the entire 40 years he has been in business.

“He was making better suits, and I was knocking him off all through those years,” he said. “As a design talent, he certainly inspired me. I copied almost everything he made. We used to meet for lunch once a year, never knowing what was going to happen to Kasper would happen, with Leslie Fay going into bankruptcy.”

In 1992, Kasper ASL was a division of the Leslie Fay Cos., which was rocked by an accounting scandal in which two of its executives fraudulently reported quarterly figures. In April 1993, Leslie Fay was forced to declare bankruptcy, where it remained for five tumultuous years and eventually folded.

Levine said after that, “We started talking about ‘What if?’ Kasper was sold to Jones, and then I went to Elie and said, ‘I’m ready.’ From that point, it took less than two weeks. It’s been a great run.”

The executive noted the Tahari ASL suit and dress business, which had initial projections of $75 million in annual sales, went to “$175 million to $200 million in a few years.”

“Elie has always had the confidence that I would make a product worthy of having the Tahari name on the label,” he said. “Honestly, after Kasper, I never thought it could happen again.”

The business started with suits, and then Levine began to do private label, mostly for Dillard’s, which he said “has developed into a huge business.” The Tahari ASL collection has also moved into what he calls “suited separates, which is very good right now,” he said, “and our dress business has been fantastic.”

Levine also runs the Catherine Malandrino business. Last month, Bluestar Alliance acquired a majority stake in the Catherine Malandrino brand and intellectual property assets from Tahari ASL and established a joint venture that is majority-owned by Bluestar, in partnership with Tahari ASL. Levine said Tahari ASL retained about 25 percent ownership.

Tahari and Levine had invested and formed a partnership with Malandrino in 2011.

“I was looking for a sportswear brand for a long time,” he said. “Elie always admired Catherine as a designer, and I felt the same way.”

He noted that the Malandrino company had fallen into a difficult financial condition, particularly with large investments in its own stores in places like Las Vegas and Los Angeles that had not done well.

“We opened eight months ago for fall, and it’s been fantastic,” Levine said. “Now, we’re really going to blast that open.”

He said Blue Star’s expertise in licensing and brand extension “will take the company sky high.”

Malandrino said at the time of the Bluestar investment that her diffusion line, which was launched for spring 2013, has wholesale volume of between $15 million and $20 million, while the designer collection generates wholesale volume of around $25 million and is sold in such stores as Bergdorf Goodman, Saks Fifth Avenue, Neiman Marcus and Bloomingdale’s, as well as on her Web site, catherinemalandrino.com, and through international accounts.

From his first job in the shipping department in the Kelley Arden division of Stacy Ames Co., where he eventually became sales manager, to his days at Bobbie Brooks, Sasson, Anne Klein, Sassco and Kasper, Levine said he has seen the industry evolve beyond his imagination.

“It’s a completely a different world today,” he said. “In the old days, if you didn’t sell Macy’s, you could sell to Gimbels or Ohrbach’s. There were so many opportunities.”

Today, following decades of retail consolidations, the industry has changed drastically, especially at the department store level, he noted, which has dwindled down to a precious few key operators.

“If anybody would have told me seven or eight years ago that Amazon would be one of our biggest accounts, I would have had them put away,” he said. “It’s been one hell of a trip from the world after World War II to the one we’re in today in the fashion business. You’ve got to be better today than you were back then. In those days, if you were mediocre, there was always someone to sell to. Today, you’re either with it or you’re not.”

One of the biggest stories, Levine said, is the dress sector. He said in Eighties and Nineties, the dress business had a steady decline, with many companies going out of business and stores devoting less space to the category.

“When it did reemerge [which he pinpointed to be in 2003], it did so with young women who were brought up in a world without dresses,” he said. “So it became something new they had never worn. It reemerged out of the sportswear market. I started to see in the sportswear collections that among their bestsellers were a group of dresses.”

Levine noted that for the first part of his career, he manufactured locally, like everybody else. Then he started to manufacture in Asia in the mid-Seventies, in the early days of importing. It was at that time that Levine had sold 50 percent of Bobbie Brooks to Chinese manufacturing executive Tomio Taki.

“Tomio Taki brought me to China, and I started operating out of there,” he said. “By 1980, we were totally operating out of Hong Kong and Taiwan, and in the Nineties I transitioned to China. In 1995, we opened our own factory in China while I was at Kasper and it was very successful. When Elie and I opened in 2001, at the same time we opened a factory in [Shenzhen] China. We had 200 people working for us. Today, we have about 700 people. It’s a very good factory. Suits are a very difficult product to make. There has to be a mentality in the factory to work with very high standards.”

About 15 to 20 percent of the line is made in that factory. Levine noted that about 10 years ago, he started manufacturing in Vietnam, and “we do quite a bit there now.”

Levine said the Catherine Malandrino line does some manufacturing in New York. He agreed with the trend that much of the production that has expanded or come back to the U.S. is in the knit sector, which has become more automated, and the ability to do smaller production runs.

He said his business and the Tahari business have done well in the last five years since the economic downturn.

“In the end, it boils down to product,” he said. “If you have product that’s retailing well, you’re going to exceed the economy.”

Looking ahead, Levine said the dresses and suited separates have been strong and should continue to grow. Noting that the high-end Elie Tahari brand has a chain of its own stores, Levine said, “We’re definitely thinking about” opening Tarahi ASL stores down the road.

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