Marisa Christina, Inc.
Marisa Christina, Inc.
Marisa Christina, Inc.
Sales: $86.5 million (1995)
Stock Exchanges: NASDAQ
SICs: 5137 Women’s, Children’s, and Infants’ Clothing and Accessories—Wholesale; 2339 Women’s, Misses’, and Juniors’ Outerwear, Not Elsewhere Classified
Marisa Christina, Inc. is a popular designer, manufacturer, and marketer of clothing for women and children. The company has two major operating divisions, Marisa Christina and Flapdoodles, and also owns the well-known Adrienne Vittadini designer brand, acquired in early 1996. Under the Marisa Christina banner, the company designs and produces a broad line of “better” women’s clothing. The classic Marisa Christina look includes sweaters with elaborate embroidered patterns, often combined with complementary skirts. The company is particularly known for the seasonal and holiday motifs it introduces into its line each year. In addition to its Marisa Christina Classics, the Marisa Christina division includes Marisa Christina Studio for more fashion-conscious consumers; a line of knit suits for professionals, marketed under the name Marisa Christina Knits; and Lisa Nichols, a line of ornamented knit sweaters with its own artistic look. The company’s Flapdoodles division designs and makes a broad range of children’s clothing under both the Flapdoodles and Marisa Christina brand names. Marisa Christina products are distributed to over 3,500 establishments, and can be found at many top department store and specialty chains, including Bloomingdale’s, Lord & Taylor, and Saks Fifth Avenue.
Marisa Christina was founded in 1971 by David Seiniger. Seiniger named the company after two important women in his life: his favorite company model, Marisa, and his sister, Christina. The first generation of Marisa Christina sweaters were knitted from a wool, cotton, and silk blend by nuns in the Italian village of Lucca, Tuscany. Early on, the company established its name with a classic look featuring matching wool top and skirt sets. As the line developed a following, Seiniger moved the knitting operation from Italy to Hong Kong, where he could pay workers less than the rates charged by the Tuscannuns.
In 1976, Seiniger and co-owner Irwin Turner—Marisa Christina’s vice-president and treasure—sold the company to soap and detergent giant Colgate-Palmolive Company. Under its new ownership, Marisa Christina was operated as a separate subsidiary, with Seiniger and Turner both retaining their positions at the company. By 1981, Marisa Christina annual sales had grown to $32 million. The company changed hands again that year. Carl Marks & Co., a New York firm specializing in leveraged buyouts, acquired a 50 percent stake in Marisa Christina as a result of that transaction.
As the 1980s continued, however, the company began to lose steam. Sales plummeted to $10 million by 1986, as the Marisa Christina brand name fell out of favor with buyers in the fickle world of fashion. Meanwhile, Seiniger’s failing health began to interfere with his ability to run the company. With Seiniger no longer able to devote the energy necessary to run a struggling company, Marisa Christina found itself in need of a new president. David Zalaznick, a Carl Marks & Co. partner, offered the job to Michael Lerner, an old acquaintance with a strong background in the apparel business. Lerner had recently quit his family’s sportswear apparel company. As an incentive, the Marisa Christina ownership group offered to sell Lerner a 25 percent stake in the company for a mere $75,000. Lerner, convinced that the name Marisa Christina still carried some weight, accepted the stock and the job.
As the guiding force at Marisa Christina, Lerner orchestrated a turnaround that was no less than remarkable. Under Lerner, the company began bringing out five new collections of sweaters a year. He also added pants to the traditional sweaters and skirts line. Most importantly, Lerner introduced the elaborately embroidered sweaters that would become the signature Marisa Christina look. With ornate motifs that changed with the season, these sweaters made the Marisa Christina line instantly recognizable on store racks. They quickly became fixtures on the floors of many of the nation’s top department stores.
These changes were made without tampering with the casual-but-traditional image the company had cultivated over the years. Lerner also cut costs by using a cotton-ramie blend, far less expensive than the wool used in Marisa Christina clothing up to that time. While economizing on materials, Lerner managed at the same time to inflate the value of the Marisa Christina name. This was necessary in order to justify the premium prices being charged for Marisa Christina apparel, since there was no way the company could compete on price with the likes of the Ann Taylor or Limited chains.
By the early 1990s, Marisa Christina was generating impressive profits on a regular basis, largely thanks to the inspired marketing ability of Lerner and his staff. In addition to its seasonal designs and holiday specialties, the company was constantly on the lookout for themes that were popular but traditional, while avoiding trendy fashions for the most part. In 1991, for example, Marisa Christina signed a licensing deal for the right to put out a line of Snoopy sweaters. That kind of market savvy helped the company grow its sales to $39 million by 1992, with earnings reaching $4.4 million.
In 1993, Marisa Christina thrust itself into the children’s apparel market with the purchase of Flapdoodles. Although Flapdoodles were found mainly in children’s boutiques, Lerner’s hope was that the line could also be sold through Marisa Christina department store channels. By 1995, Flapdoodles accounted for about a third of Marisa Christina’s total sales.
The year 1993 also marked the introduction of a line of ornamented knit sweaters designed by Lisa Nichols. The Lisa Nichols collection, brought out for that year’s holiday season, featured bold colors in artistic designs concocted for customers with a youthful, independent self-image. The addition of the Flapdoodles and Lisa Nichols lines helped boost the company’s earnings to $4.8 million in 1993, on sales of $56.9 million.
In spite of these big-time numbers, much of Marisa Christina’s success was based on its ability to connect with smaller outlets. As much as 40 percent of company output was sold to small suburban stores, where managers are well-acquainted with the personal tastes of their customers. In June 1994, Marisa Christina went public, with the sale of 30 percent of the company’s stock—worth $32.5 million—by Lerner and the leveraged buyout team that had brought him in. For that year, the company reported sales of over $76 million, nearly double its 1992 figure. The company also saw its net earnings jump to $8.5 million.
As the 1990s moved along, Marisa Christina continued to launch new products. Marisa Christina Kids was introduced for the 1994 holiday season. This line featured children’s sweaters of classic design, as well as some matching mother-daughter outfits. Targeted primarily at mothers desiring to extend their own taste for the Marisa Christina novelty look to their children, the Kids line enabled the company to exploit the marketing and distribution network already in place for its Flapdoodles collection. For the Fall 1995 season, the company introduced Marisa Christina Knits, a line of two-piece knit suits with a tailored, professional look. Like Marisa Christina’s existing products, these additions to the company’s apparel output consisted of practical clothing, and were not designed to turn the heads of those interested in high fashion. Lerner makes this point in a 1995 article in Forbes, in which he is quoted describing a recent conversation: “Someone at a cocktail party said to me: ‘Well, how do you like the fashion industry?’ and my answer was, I wouldn’t know. We make clothing’.”
By 1995 Marisa Christina was no longer a secret to anybody, particularly to anybody on Wall Street. With profit margins more than twice as high as the average in the apparel manufacturing industry, the company checked in at number six on Forbes magazine’s list of Best Small Companies. In November of 1995, the stock Lerner had bought for $75,000 was worth a cool $24 million. By that time, the company had built up a $20 million cash pool, and appeared to be poised to make another big acquisition, its first since picking up Flapdoodles in 1993.
The expected acquisition took place in early 1996, when Marisa Christina purchased designer knitwear brand Adrienne Vittadini, a label regularly found on the racks of high-end department stores. Vittadini, whose sales had fallen from a peak of $115 million in 1990 to $37 million in 1995, represented an aggressive attempt on the part of Lerner and Marisa Christina to go head-to-head against the best-known brands in the better clothing category, including such major names as Liz Claiborne and Jones New York. Company officials hoped that access to Marisa Christina’s successful and growing marketing and distribution channels could breathe some much-needed life into the tiring Vittadini line, although the two companies were to be operated as separate entities with distinct stylistic identities.
A number of industry analysts viewed the addition of Adrienne Vittadini as the move that brought Marisa Christina into the big leagues of the apparel world. Bringing an upper-end designer brand into the fold gave the company its first access to a number of important specialty outlets, including Neiman Marcus and Saks Fifth Avenue. Prior to the acquisition, Marisa Christina was known among Wall Street types as the apparel industry’s “little jewel” (in the words of analyst Marie J. de Lucia as quoted in Crain’s New York Business). With its new, higher-profile status within the industry, Marisa Christina hoped to sustain an annual growth rate of 20 percent during the second half of the 1990s. Regardless of whether the company is more interested in making clothing or making fashion, the one thing it has certainly shown an aptitude for making is money.
Marisa Christina; Flapdoodles; Adrienne Vittadini.
Gault, Ylonda, “Low-Key Marisa Christina Now Hot-Growth Possibility,” Crain’s New York Business, February 12, 1996, p. 23
Moukheiber, Zina, “Pumpkins and Stars,” Forbes, November 6, 1995, pp. 254-255.
Ozzard, Janet, and Valerie Seckler, “Expansion Strategy for Marisa Christina: Revitalizing Vittadini,” Women’s Wear Daily, January- 22, 1996, p. 1.
Shonfeld, Erick, “A Bright Spot in Apparel,” Fortune, September 18,
—Robert R. Jacobson