Article on the Manhattan Group

Thought this was an interesting article from The Financial Post on the Manhattan Group,the Montreal,Canada-based company that began co-designing,manufacturing and distributing L.A.M.B. last year,along with working with other celebrity fashion lines.Gwen’s name is mentioned a couple of times throughout the article.

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Three thousand, nine hundred and seventy-three kilometres northeast of Hollywood, Montreal businessman Ted Rozenwald and his Manhattan Group fashion company has quietly become a leader in the world of celebrity fashion.

In the past 24 months Mr. Rozenwald has inked deals to co-design, manufacture and distribute clothing lines for from the Black Eyed Peas and has taken over the L.A.M.B. by Gwen Stefani collection. Rihanna’s management team called the other day to discuss a possible partnership, and a handful of other A-list performers are eager to meet with the executive.

The privately held firm is doing annual sales figures “in the mid-eight figures,” says Mr. Rozenwald, and is expected to grow substantially over the next 18 months. Industry experts predict’s “” clothing line alone could do $5-million in its first year and grow to a $400-million business with the addition of women’s wear and accessories.

Alan Middleton, marketing professor at the Schulich School of Business at York University in Toronto, says celebrities are looking to launch clothing labels as an investment in sustaining their careers. When the singing or acting is over, they want something to fall back on. Jay-Z and Jessica Simpson have been particularly successful in this area. Their fashion and accessory brands each generate annual sales over US$500-million.

For retailers continually on the hunt for exciting new lines, celebrity wattage is welcome, particularly in sluggish times. Total apparel sales in Canada were down 3.2% last year, with menswear dropping more than 5%, according to Trendex North America. Retail analysts say this is partly to do with a lack of new products that appeal to a younger demographic.

But while the name may get the line into the stores, it is the execution, of course, that determines its success or failure. Celebrities quickly learn that shipping to stores on time is the biggest challenge when launching a line. Sean Combs’ Sean John line had a spectacular first collection in 1998 and retailers made sizeable orders. Unfortunately, four months later, representatives of the line called retailers and said they couldn’t ship the orders due to production delays. It took the rapper several seasons to repair that misstep.

Jeff Farbstein, vice president and general merchandise manager for Harry Rosen Inc., says the Manhattan Group has

proven itself a dependable supplier. “What makes this Canadian company so successful in this field is the global infrastructure it has built,” says Mr. Farbstein. “Ted has built extensive relationships in Europe and Asia, so he is able to source fabrics and ensure high-quality craftsmanship. His is one of the few companies to have a team in China that checks quality, fit and ensures all shipments are delivered on time.”

Harry Rosen is carrying the line in Canada, as is Leone in Vancouver. Prices range from $75 for a t-shirt to $635 for a perforated leather jacket. Denim jeans are priced at $285, cotton sweaters go for $160 and military-inspired nylon jackets for $315. A leather duffel bag goes for $455. Rosen in Toronto sold 21 pieces in the first hour they had

the clothing on the floor.

There are countless designers and fashion houses able to execute a clothing line. But only a few crack the celebrity circle. “You can design and produce celebrity fashion anywhere in the world today thanks to modern technology,” says Prof. Middleton. “You just need to be linked-in to Hollywood and know the key players. Canadians can compete in niche celebrity brands up to a point. The challenge comes when the global business grows to such a size that you have to have a lot of capital and a lot of help to manage the business.”

Mr. Rozenwald launched the Manhattan Group 20 years ago after working for his brother-in-law in the garment industry throughout his teenage years. He put in 60-hour work weeks in the shipping and cutting rooms, learning all

aspects of the business, from how to line up patterns to boxing final garments.

“I hated school, but loved the fashion industry, so there was no doubt I’d pursue a career in the industry,” he says.

A family friend was so impressed with his work ethic that he offered Mr. Rozenwald a sales manager position in his Quebec music business that was expanding internationally. The job was to oversee all sales efforts in the United States. Two years later, a neighbourhood friend approached Mr. Rozenwald to start a fashion company. The pair would travel the world in search of cool brands and bring them to Canada.

“I’ve been importing clothing from Europe for about 20 years,” he says.

Today, the Manhattan Group designs and produces and distributes a number of fashion lines inhouse including pure and simple, industry, Debbie Shuchat, and d collection. The firm distributes designer denim line AG Adriano, Goldschmied Jeans and Superdry in Canada, in addition to producing and distributing the and LAMB collections globally.
“My team and I have been going to Hollywood for years working with stylists and dressing celebrities. We’ve built a strong reputation for being honest, good guys, who are focused on quality,” says Mr. Rozenwald.

His annual Hollywood “Style Lounge” events helped build word-of-mouth support in celebrity circles. This year,

he rented the Carole Lombard penthouse suite at Hollywood’s famed Roosevelt Hotel, for US$3,500, where he showcased a different fashion brand in each room. Guests, including actors, musicians and representatives from Los Angeles’ top five talent agencies were fitted by professional stylists then partied on the rooftop patio.

“Everyone left with a bag of clothing,” says Mr. Rozenwald. “I kept hearing ‘Wow, you are serious about what you do.’”

Mr. Rozenwald was careful to nurture connections, taking meetings with individuals in all aspects of show business. He was recommended to by the musician’s attorney, whom Mr. Rozenwald had gotten to know through a mutual contact.

“ and I are partners,” says Rozenwald explaining how the business deal is structured. “I’ve financed the entire business so he knows there is commitment to this on my part. He knows I’m serious about what I do and this builds trust.”

The execution of the designs is left to the Manhattan Group’s 93 staff, including 20 in-house designers who work in the Montreal headquarters and oversee global sourcing associates, a new showroom in New York City and the quality control group in China. A brand manager and product specialist are also assigned to each celebrity brand and this team travels regularly to Los Angeles to meet with the likes of Stefani and
Mr. Rozenwald brings a business edge to the collaboration. “Stores are looking for fresh and different silhouettes. They want something that is cool and unique without being too far out there. Our design team conveys the celebrity personality in the clothing, but brings a certain commercialism to it. It has to sell on the sales floor.”

For his part, says he’s impressed by the Montreal designer. “I like his passion to win. And that he’s a nice dude. You can win and be a dick about it, but he wants to win and remain a nice, approachable, humble, strategic guy. He knows how to look at the whole gamut and get a bird’s eye view. That’s rare and inspirational.”

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