FASHION : Units Creator Wrapped Up in Legal Woes

Designer Sandra Garratt is still searching for the pipeline from her million-dollar ideas to the bank.

Her first wardrobe invention, the modular fashion line Units, is an international clothing chain that grosses about $75 million annually. Her second brainchild, Multiples, is expected to gross $60 million worldwide this year.

Garratt’s worth? “Less than zero.”

As happened with the late Halston, as well as Norma Kamali, Rebecca Moses, Ronaldus Shamask and scores of talented designers, a web of legal and financial woes have recently jeopardized Garratt’s career. And for Garratt, 38, this isn’t the first time. A pioneer in today’s component-dressing trend, she says she has repeatedly been outmaneuvered by the manufacturers who once backed her.

In October she filed for protection under the U.S. Bankruptcy Code amid her protests that her former collaborator in Multiples, the Dallas-based Jerell Inc., usurped her creative control and withheld $4.8 million in royalties.

In April, a Dallas bankruptcy judge approved a $130,000 settlement offer from Jerell and freed the manufacturer of further royalties to the designer.

“In volume manufacturing, there aren’t many good guys. It’s sharks,” says Garratt, a former Californian who shares a warehouse loft with her 12-year-old son in the shadow of Dallas’ post-modern skyline.

“If you think they’re your friends, you’re mistaken.”

“We were very fair to her,” says Jerell president Jerry Frankel, noting that his company paid Garratt “$2 million cash” over two years, before litigation.

The Multiples morass is Strike 2 for Garratt, a tall, ascetic-mannered woman who grew up in Malibu Canyon and attended Agoura High School. Four years ago, she also lost big on Units, her original dress-the-masses idea.

In the early 1980s, Garratt’s generic, cotton/polyester knits were the rage of Bohemians and off-hours models. Ritzy Dallas matrons braved their way to her warehouse studio for the proletariat wear that could create a svelte illusion on the least likely figures.

Each piece came with a printed Units “manifesto,” advocating global responsibility through no-waste, no-fad dressing.

She wholesaled her clothes to Maxfield Blue (now Maxfield) in West Hollywood and Henry Bendel in New York.

In 1986, she found backing for her fledgling Units line from a pair of Dallas venture capitalists. She became a minor partner in Stinu Corp. (that’s Units spelled backward), formed to manufacture the line. Within three months, she was “squeezed out,” she says, by “macho Texans” who wanted her concept and patterns, but not her. She received a $75,000 cash settlement, lost rights to the Units name, and agreed not to compete with Units for six months.

Don Rhoden, Stinu’s former CEO, says Garratt left “of her own choosing” before Units opened its first store. Now there are 200 outlets across the United States, Canada and Europe, many of them in Southern California shopping malls, including Century City.

“She was the one who had the problem with me. Not me with her,” says Rhoden, who calls Garratt “very charming and bright.” He says he regretted her departure.

“When she left, we had to do the best we could.”

In 1987, Units was sold to J.C. Penney for an industry estimate of $75 million.

“Disaster follows any creative person who has commercial viability,” says Garratt, who passes time on her stationary bike while waiting to find a backer for her newest fashion concept.

Former employees describe this calm, auburn-haired woman, a vegetarian and animal rights advocate, as being so sensitive to her workers that she kept a masseuse on call during office hours. They see her as driven to interpret needs of “the people”--not to dress Ivana Trump. She’s known for her purity of purpose, not business sense.

“Sandra is a little naive and soft for a business as tough as the apparel business,” says her adviser, New York business consultant Bert Israel.

“She won’t compromise her designs or ethics for a dollar,” says Clint Colker, an alumnus of both Stinu and Jerell. “She’d rather go back to cleaning houses and maintain her integrity than sell out to ‘garmentos.’ ”

Garratt finds one constant in her life: “Success and failure. It’s always back to back.”

At her 1974 graduation fashion show at Los Angeles’ Fashion Institute of Design and Merchandising, retailers booed her narrow silk skirts and tunics, she says. “The girl who was least sophisticated, they loved her stuff,” she recalls. She was about to leave the show in despair when it was announced that she’d won the Bob Mackie Award, a top creative honor voted on by faculty and press.

In New York, she created windows for Halston’s Madison Avenue store and worked in the shops of Mary McFadden and Zoran. She married fellow designer and California native Michael Garratt.

They formed a design company in New York that lasted one season. When it fell apart in 1977, they moved to Dallas at the urging of Michael’s brother, who lived there.

Here, Garratt created must-see windows, among them some sexy lingerie scenes, at the pricey women’s boutique Marie Leavell. Her provocative visuals, she says, got her fired. Broke and divorced, she started stitching cotton knit jail-striped dresses, bandeaux and leggings: the mix-and-match forerunners of Units.

Garratt’s idea was to create simple, accessible clothes. She’s drawn to basics like Levi’s and Jockey T-shirts--garments that, “when you finally retire them, you almost mourn for them.”

She made Units as a one-size-fits-all system of mixable parts, cut from square patterns with little fabric waste. The concept has proven so lucrative that Units has not only grown to vast proportions, but also has numerous industry copycats.

Indeed, just months after she left Units, Jerell offered Garratt a licensing arrangement for a second Units-style venture. At the time, she was cleaning homes for cash.

She says she lacked a rapport with Frankel, but adds: “He had a factory in place. I was impressed by his manufacturing potential.”

“The mistake she’s made,” says Israel, “is that she hasn’t, in setting up her deals, screened carefully and long enough the people and situations. Had she analyzed before jumping, she would have probably waited for a slightly different opportunity.”

Says Frankel: “I don’t think she realized how good a company we were, or how much we were doing for her.”

Though sales of Multiples hit a reported $100 million the first year, the deal with Garratt soon soured.

“It was difficult working with her after the first year,” says Frankel. “We still tried our best, and it just didn’t work.”

Garratt accused Jerell of using unapproved fabrics and colors and poor construction. In a March, 1989, lawsuit against Jerell, she also asserted that the company had developed a similar line that it was selling in competition with Multiples and that she’d been shut out of a portion of her royalties. Frankel denies all her charges.

Last summer, she started marketing a new, independent clothing line. Her mistake, industry watchers say, was that she planned to finance the collection with her Jerell royalties. When Jerell countersued her last fall, the company withheld her royalties. When the payments stopped, Garratt’s fashion launch was canceled in a tangle of unpaid bills.

George Goldstein, a former Jerell vice president who joined Garratt in business last summer, says Garratt’s new line had secured $20 million in wholesale orders--had she only been able to ship the clothes.

“To a degree, she shot herself in the foot,” says Goldstein, now a Los Angeles-based clothing wholesaler. “She had no provision to survive without that (royalty) revenue.

“You don’t go out and buy missiles from your enemy, and use them against them, without them getting mad at you.” Still, he says he would work with her again. “I would do anything to help Sandra finish her mission. She means something to people. She’s not just a commodity.”

Unchanged by bankruptcy, Garratt still dresses in T-shirts and purple-dyed long underwear. She sends her son Wesley to a Montessori school. She sleeps on a mattress on the floor in a rented brick warehouse.

Since last fall, she’s had several false starts with investors. They lose interest, she says, when they realize that “Sandra Garratt” continues to appear on all Multiples’ packaging. According to the April bankruptcy settlement, Jerell may continue to use her name through January, 1991.

“One of the things she has to offer, besides her sizable design talent, is a nationally recognized name,” says Garratt’s attorney, Robert Primeaux. “She can’t present that cleanly to a potential licensee.”

The new Sandra Garratt line will consist of three interacting collections: body wear, active wear and a new dressing system called Whole.

Though proud to have created Units and Multiples, she says they look contrived to her these days. Units, the J.C. Penney subsidiary, is made by a design team and has expanded to include voile and eyelet fabrics, says Units spokeswoman Cynthia Sutton. Multiples, sold in 450 department stores, is marketed by sizes and includes the new collections of Multiples Motion and Multiples Choice.

As she waits for deep pockets to find her, Garratt maintains: “I haven’t lost my center. The money isn’t part of my identity.

“There’s no shame in being victimized. But I don’t want to be a victim again.”