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O.C. BUSINESS PLUS | HEARD ON THE BEAT / RETAIL

Ex-CEO Lewis Left With Nothing to Show for His Work at Mossimo

May 04, 2000|Leslie Earnest | Leslie Earnest covers retail businesses for The Times. She can be reached at (714) 966-7832 and at leslie.earnest@latimes.com

It seemed like a good deal at the time.

When struggling apparel designer Mossimo Inc. lured industry veteran Edwin Lewis out of retirement in late 1998, founder Mossimo Giannulli agreed to give half his shares of the company to the new chief executive.

Giannulli had snagged a highly regarded former Tommy Hilfiger Inc. chief executive to right his listing ship. And Lewis was suddenly beneficial owner of about one-third of the company's stock.

The industry cheered. Mossimo's stock bounced. More Hilfiger executives scampered to Mossimo's headquarters in Irvine.

What a difference 16 months makes.

In March, Mossimo announced it had struck a licensing deal with Target Inc. that means its sportswear will be sold only in the discount chain's stores, beginning next year. It said that the company's auditors questioned its ability to continue as a going concern without additional financing. The company also said Lewis was resigning.

Now, regulatory documents show that Lewis received no salary or stock. "He was granted the stock options," said Jody Love, Mossimo's vice president of finance. "Upon his resignation they were canceled."

Love declined to elaborate. Neither Lewis nor Giannulli could be reached for comment.

Giannulli had agreed to give the company the stock needed to fund options exercised by Lewis. But when Lewis resigned without exercising his options, Giannulli again became the beneficial owner of the nearly 5.2 million shares involved, according to documents filed with the Securities and Exchange Commission. That boosted his total back to about 10.4 million shares, about 69% of the company's stock.

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