Inside Wall Street
SALANT LOOKS BETTER IN JEANS
You might say Salant (SLT), which manufactures men's and women's apparel, including designer brands Perry Ellis and John Henry, was a casualty of the 1980s: It got deep in debt and in 1990 filed for Chapter 11 protection. Three years later, Salant emerged from bankruptcy after restructuring. Now, it's back on the Big Board, where it climbed from 3 a share in mid-May to 41/8 on July 25.
And there could be more upside action ahead, if you look at the big players who have bought in: Leon Black, whose Apollo Group has acquired a hefty 41% stake, and Mutual Series Group's Michael Price, who holds 5%.
Despite losses in 1994 and the first quarter of this year, Salant could be in the black for this fiscal year, says George Putnam, editor of The Turnaround Letter in Boston. The company has dealt with cost problems at some plants, he notes, and pricing pressure should be offset by rising revenues, which totaled $419 million in fiscal 1995.
What could really put Salant back on track, says Putnam, is Canyon River Blues, a line of denim and other casual wear it's producing for Sears Roebuck. "Sears expects to do a huge promotional campaign for the new line in early fall," says Putnam.
He figures the Sears line could kick in during the third and fourth quarters and estimates it might help Salant earn 40 cents a share this year.
Putnam argues that vulture investors Black and Price won't let up till management does its best to push the stock up. "This Sears line will be a huge help," he adds. Putnam expects the stock to hit 10 in a couple of years.BY GENE G. MARCIAL