Flight With Pegasus Isn’t Much Fun for 3 Designers
It looked like designer heaven to red carpet favorite Pamela Dennis, hip-hugger queen Daryl Kerrigan and handbag designer Angela Amiri when they became part of Pegasus Apparel Group, the newest deep pocket to arrive on the fashion scene last year.
The talented three believed the budding fashion conglomerate could help them soar into the style stratosphere of design deities Tom Ford, Michael Kors and Marc Jacobs. After all, New York-based Pegasus was patterned after European conglomerates Gucci Group and LVMH Moet Hennessy Louis Vuitton, the new models for high-end retail success.
What a difference a year makes. Both Dennis and Amiri have bought back the licensing rights to their names. Production of Kerrigan’s fall line, which she showed in February, was suspended in April and her year-old Melrose Avenue boutique closed the same month. Welcome to the life of a fashion designer. Off the runways, it’s anything but glamorous. Striking a balance between innovative design and salability remains one of the toughest parts of the business.
Pegasus attracted these designers because instead of gobbling up iconic brands such as Yves Saint Laurent and Givenchy like Gucci and LVMH did, its strategy was to build up small niche brands. Along with Dennis, Daryl K and Amiri, the American conglomerate owns a majority stake in the businesses of Miguel Adrover and Judith Leiber, both of whom have no complaints. Adrover, the once poor, unknown Majorcan designer who became a media darling crafting coats out of neighbor Quentin Crisp’s mattress, now sells at Neiman Marcus and Barneys New York. Evening handbag maker Leiber will launch a long-awaited daytime handbag line later this year.
White-haired chief executive Stephen Ruzow (who previously headed Donna Karan) told Women’s Wear Daily a year ago that his goal was to acquire eight to 10 “underdeveloped labels” and turn them into stars. He also said he was under no time pressure from his parent company, a $800 million private equity manager with holdings in paper goods and Equal artificial sweetener, to recoup investments.
So why does Pegasus appear to be scaling back so soon? Spokesman Jason Weisenfeld said the changes are part of business as usual. “If we feel a business does not have the potential to achieve profitability, we need to make the appropriate modifications to the business plans.”
Dennis’ business is one undergoing change. Just weeks before the designer was scheduled to show her fall collection in New York in February, Pegasus canceled the show. Last month, the conglomerate partnered with another company (Kay Unger) to produce Pamela Dennis Evening instead of the fall couture line. Although offered the opportunity to design the lower priced, secondary line, Dennis won’t be doing it.
This week the designer, who has dressed celebrities from Jamie Lee Curtis to Joan Rivers, characterized the new collection as “a knockoff,” and said she has hired a lawyer to sever her relationship with Pegasus altogether. Meanwhile, she has managed to secure the rights to use her own name to produce a couture line herself, assuming she can find another backer.
Pegasus wants to “make me a minor leaguer,” the New Jersey native said by telephone Monday, adding that she would have preferred to do projects like bridal wear and shoes.
Dennis’ relationship with her last backer, Samsung Cheil, ended badly, with company representatives throwing her clothes in a dumpster outside her Seventh Avenue showroom, she said. Sources close to Pegasus have hinted that Dennis can’t stay partnered with anyone because she cannot be pleased. Nonsense, says legendary retailer Fred Hayman, a champion of her talent since the late 1980s when he carried her gowns in his Beverly Hills store. “If I were in another business, I’d back her myself.”
Amiri’s hopes for developing her handbags with Pegasus have diminished within nine months of their deal. Pegasus is still an investor, but the company, according Weisenfeld, has passed production and distribution responsibilities back to the designer. Amiri would not comment on the relationship beyond saying that it had been “negative.”
Industry insiders have said that Pegasus may be refocusing its efforts on larger companies, including Daryl K, which has been embroiled in its own controversy. Months after signing with Pegasus, Kerrigan told Women’s Wear Daily that the company respected designers. Kerrigan declined to be interviewed for this story.
But several of Kerrigan’s original employees were fired and former DKNY division presidents Mary Wang and George Ackerman were hired to help transition Daryl K from a cult favorite to a commercial success. Both industry vets left within eight months and have not been replaced. Neither would return phone calls.
Kerrigan’s fall line was scrapped so Pegasus could find a new partner for distribution and production could be found, according to Weisenfeld. But talk on Seventh Avenue is that Pegasus did not want to back the poorly received collection, which included T-shirts emblazoned with police sketches of the Unabomber.
Despite the starts and stops, Weisenfeld said Pegasus is in it for the long haul. “We are still interested in acquisitions,” he said. “Our criteria have just changed.”
