Word: wachner
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...assets, rivals such as VF Corp., Kellwood, Jones Apparel and Sara Lee would be potential buyers. Although technically abrogated by the Chapter 11 filing, the Calvin Klein license, at least for the moment, will probably stay with Warnaco until the judge rules on it. So too, most likely, will Wachner. Her contract includes an estimated $25 million golden parachute. Which only goes to show that while fashions may come and go, some things in corporate America never go out of style...
...that, at least according to the suit Calvin Klein filed a year ago, is exactly what happened to Warnaco. In that case, settled earlier this year as a hungry New York City press corps waited for the trial to begin, Klein tried to recapture his license, claiming that Wachner was destroying his jeans brand, skimping on quality and flooding the discount bins at merchandise clubs. Of course, Klein didn't seem to have any such complaints until he had trouble finding a buyer--including negotiating with Warnaco--for his suddenly unfashionable company. Warnaco, in its view, was simply responding...
...long as Wachner kept growing the brands, her flaws were easy to overlook. Her reputation as a taskmistress who demanded perfection from her employees--and torched them if she didn't get it--is legendary. Her friends say it's exaggerated. "I know she's a loyal and caring person. She asks nothing of her people that she doesn't ask of herself," says Richard Grasso, CEO of the New York Stock Exchange...
Shareholders find it harder to ignore some of Wachner's more complicated dealings--like her dual role as chairman of both Warnaco and Authentic Fitness for much of the past decade. Wachner and a group of investors bought Warnaco's Speedo swimwear division in 1990 and took it public two years later as Authentic Fitness, only to bring it back to the corporate fold in 1999--a bit of financial gymnastics that helped prop up Wachner's bank account but ultimately loaded Warnaco's balance sheet with an extra $600 million in debt...
When the Calvin Klein underwear business, which Wachner bought outright in 1994, began to mature in the late '90s, Wachner's aggressiveness started to look like a liability. In an attempt to make quarterly numbers, many, including Klein, believe she flooded stores with steeply marked-down merchandise. The eroding economy did the rest...