As one would soon to expect, there’s trouble at the Halston house. With everyone leaving and the company changing through hands, one could suspect that things were going to get ugly pretty soon.
SCS reported yesterday that Ben Malka, former president of BCBG Max Azria, finally got the new job of Halston’s new chairman and chief executive. Sources close to the Halston situation told The NY Post that Malka has big plans for floundering luxury brand, aiming to revive the brand with a multi-tiered retailing and licensing strategy. With an estimated $20 million dollars from Hilco Consumer Capital, the turnaround bid will be capped with the hiring of a new designer to resuscitate Halston’s runway for Fall 2012 collection, according to a source briefed on the plans. Too bad that’s all new news to Halston’s longterm equity investors.
The minority investors have been complaining they had been trying in vain to learn whether Halston would make another cash-intensive attempt at high fashion, or instead “license out the brand to a slew of department stores and discount chains like Walmart and Target“. Shareholders are also worried that they could be bought out without even realizing it. The brewing conflict — which, according to one source, could spark a lawsuit invoking “small shareholders’ rights” — follows bitter negotiations to refinance Halston that forced pricey payouts to head-honchos by the money-losing label.
In a written statement yesterday, a Halston spokeswoman said “the board approved [the deal] and representatives from a majority of shareholders approved it as well.” There was no further comment.
– Taneisha Jordan
Source: NY Post