Relaunching Duck Head

Ross Sternheimer plans to revive the Duck Head apparel brand.

Best known for its mid-priced khakis that were almost required attire at colleges in Virginia and elsewhere in the South in the 1980s and 1990s, Duck Head stopped doing business last year when its parent company went bankrupt.

"It is a great brand. It just needs to be restored," said Sternheimer, former president of the family-owned A&N athletic footwear and sportswear chain based in Henrico County that shut down in early 2008.

Sternheimer acquired the Duck Head brand for $2.65 million in a bankruptcy court auction last summer.

"There are a lot of opportunities," he said. "You have to take chances in life."

He envisions his Richmond-based Duck Head International LLC business becoming a $500 million venture many years from now. He figures his company could generate about $25 million in revenue by the end of 2011.

Sternheimer wants to initially concentrate on getting the classic Duck Head apparel merchandise into stores - hopefully by this fall. He said he has had some interest from retailers, including national and regional chains, about carrying the products.

But before Duck Head pants, shirts, hats and accessories become available again, Sternheimer needs to find companies to manufacture the merchandise under licensing agreements.

He also is considering looking for a strategic partner or a venture capitalist - maybe someone from the Richmond area - to help him further develop the brand.

And he wants to expand the brand beyond apparel. He would like to see the Duck Head signature logo on canoes, hunting decoys, fishing and hunting gear, umbrellas and luggage.

He even contemplates that the annual Big Brothers Big Sisters Duck Race on the James River could one day use Duck Head ducks.

"We see some real opportunities, but I'm not sure yet of all of the pieces and parts," Sternheimer said from his office near the River Road Shopping Center. "It's an open book. We are looking for ideas."

Consumers are still very interested in buying the clothing, said Malcolm Sydnor, owner, president and CEO of Old Dominion Footwear, which makes Duck Head shoes under a licensing agreement that it has had since the mid-1990s. The Duck Head shoes are sold in thousands of stores nationwide.

Hardly a day goes by when his footwear company, based near Lynchburg, doesn't receive several phone calls or e-mails from consumers all over the country asking where to buy Duck Head khakis pants, shorts or shirts, Sydnor said. Old Dominion operates the http://www.DuckHeadShoes.com Web site.

"The brand is so viable. It is one of those iconic brands like [Izod]. Duck Head was the dominant brand for khakis in the . . . '80s and '90s," Sydnor said. "It is still a very, very recognizable label."

David Urban, a marketing professor and executive associate business school dean at Virginia Commonwealth University, said Duck Head has created a lot of brand equity over the decades.

"People who grew up with it, like the baby boomers, have a lot of positive and fond memories," Urban said. "There are a lot of brands that have fallen off the radar screen and then come back strong. This could be one of them."

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Duck Head traces its roots to 1865 when two brothers in Nashville, Tenn., bought surplus Army tents made out of a heavy material called duck. They used that material to make durable work pants and overalls.

The O'Bryan Brothers company continued making Duck Head pants and other products until the business was sold in 1989.

The new owners expanded the product line to include women's apparel, increased its advertising budget and added new retailers.

Duck Head was sold in 2001 to a company that made Savane and Farah pants. It expanded where Duck Head apparel was available, including J.C. Penney, Kohl's and Belk chains.

In 2003, Goody's Family Clothing, a moderately priced family apparel retailer based in Tennessee, bought the Duck Head brand for $4.1 million to sell the apparel line exclusively at its nearly 400 stores. Duck Head merchandise sales exceeded $97 million in 2004 and were targeted to reach $135 million in 2005 - the year before Goody's went private - according to filings with the Securities and Exchange Commission.

But Goody's fell on hard times.

The chain filed for bankruptcy twice within a year - in June 2008, emerging from the court's protection in October 2008, and then in January 2009. With the second filing, the retailer decided to liquidate the business, including selling the Duck Head brand.

Sternheimer's DHIP Holdings Inc. had the highest bid just for the brand trademark - not for any product or manufacturing - at an auction held last summer, paying $2.65 million, according to Bloomberg Business News. Apparel designer Perry Ellis International Inc. came in second with a $2.6 million bid.

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Sternheimer and his family made the difficult decision in January 2008 to close the 48-store A&N chain, which traced its roots to a dry-goods shop that opened in downtown Richmond after the Civil War. The retailer blamed increasing competition, slowing sales and mounting losses for its decision to close the business.

After the chain shut down, Sternheimer started looking for other opportunities. "Life moves on, and you have to look forward to a new venture in life," he said.

In late spring 2009, Sternheimer heard about the Duck Head brand being sold at bankruptcy auction. "We found out about it fairly late in the process. When we bought it, we didn't have a plan in place."

But he knew the brand well.

A&N had been carrying Duck Head clothing since at least the 1980s, he said.

"We loved Duck Head. We knew their people. We sold a lot of their clothing," Sternheimer said.

He also introduced Old Dominion Footwear to Duck Head's owners in the mid-1990s, and that eventually led the Virginia company to sign a licensing agreement to make Duck Head shoes.

Duck Head clothing and shoes at one point accounted for roughly 5 percent of A&N's revenue, he said.

"It was a significant and important brand for us," he said.

Even after the chain had to stop selling Duck Head products when Goody's took over the brand to sell exclusively in its stores, A&N customers kept asking for the khaki pants, shorts and shirts, he said.

"Every time I mention Duck Head to people, they have such fond memories of it."

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Sternheimer knows he has his work cut out for him to restart the Duck Head brand.

Duck Head apparel will have to compete against established powerhouse brands, including Dockers, Lands' End and Eddie Bauer.

Finding the right manufacturers and distributors could be among the biggest hurdles Sternheimer's business faces, VCU's Urban said. "That assumes they can get manufacturing to the appropriate level of quality and distribution of the brand."

Concentrating initially on the classic Duck Head khaki is a smart move, he said.

Khakis have regained favor among American males, said Bill Thomas, founder and CEO of Reading, Pa.-based Bills Khakis, which makes some of its high-priced pants in Virginia.

"Khakis are now getting a lot of the fanfare from the fashion press," he said. "Five or six years ago, it was totally denim jeans."

The pendulum also is swinging back toward American heritage brands, Thomas said.

Sternheimer believes relaunching the Duck Head brand comes at the right time. But is it doable?

"Absolutely and unequivocally, we can do this," Sternheimer said. "Nothing motivates me more than a challenge. I'm not afraid of challenges and hard work, as long as I see value in it. And I am excited about the possibilities for Duck Head and making a great success out of it."