Kellwood Co · 425 · Gerber Childrenswear Inc · On 5/24/02

Filed On 5/24/02   ·   SEC File 1-14189   ·   Accession Number 914760-2-94

Business-Combination Transaction Communication   ·   Rule 425
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 425         May 24, 2002                                          19     63K 

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                                                         Filer: Kellwood Company
                                       Pursuant to Rule 425 under the Securities
                                        Act of 1933 and deemed filed pursuant to
                                          Rule 14a-12(b) and Rule 14d-2(b) under
                                                 Securities Exchange Act of 1934
                                     Subject Company: Gerber Childrenswear, Inc.
                                                      Commission File No. 1-5256
                                                              Date: May 24, 2002

         On May 15, 2002, Kellwood Company held a conference call to discuss its
acquisition (through its wholly owned subsidiary, Cradle, Inc.) of Gerber       
Childrenswear, Inc. The following is a transcript of that conference call:      

                                                                     KELLWOOD CO
                                                                   Res #20612241
                                                            Moderator: Hal Upbin
                                                     May 15, 2002 / 2:05 p.m. MT
                                                                          Page 1

KELLWOOD COMPANY

MODERATOR: HAL UPBIN
MAY 15, 2002
2:05 P.M. MT

Operator:                  Ladies and gentlemen, thank you for standing by.     
                        Welcome to the Kellwood Company Conference Call on
                       the proposed acquisition of Gerber Childrenswear,
                           Inc. During the presentation all participants will be
                    in a listen-only mode. Afterwards, you will be
                       invited to participate in the question-and-answer
                           session. At that time, if you have a question, please
                           press the one followed by the four on your telephone.
                      As a reminder, this conference is being recorded
Wednesday, May 15, 2002.  

                         I would now like to turn the conference over to Mr.
                        Hal Upbin, Chairman, President and Chief Executive
                        Officer of Kellwood Company. Please go ahead, sir.

Hal Upbin:                 All right. Thank you and I want to thank all of you  
                        on such short notice for being able to attend this
                          conference call. Obviously, it's difficult to figure
                         out when you're going to press release these things
                        so I apologize for that short notice. But it looks
        like we have a good participation.

                      The team of people involved is split between St.
                       Louis and New York so let me identify who will be
                       participating and their location so that everyone
                      will know where everybody is. In New York I have
                      myself, of course, and then Greg Adler who's our
                        Director of Corporate Development and Donna Weaver
                         who is Vice President-Corporate Communications. And
                          then in St. Louis we have Lee Capps who is Senior VP
                          Finance and our CFO; Tom Pollihan who is Senior Vice
                         President, Secretary and General Counsel; and Roger
                         Joseph who is Vice President-Treasurer and Investor
Relations.                

                          I would equally like to welcome you on behalf of the
                        Gerber shareholders who may be on the call with us
                           today. Although, of course, it is Kellwood's call and
                          it will be focused on Kellwood matters, obviously we
                         still welcome the Gerber shareholders who obviously

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                                                                     KELLWOOD CO
                                                                   Res #20612241
                                                            Moderator: Hal Upbin
                                                     May 15, 2002 / 2:05 p.m. MT
                                                                          Page 2

                        have an interest here. I want you and them to know
                         that, of course, Kellwood is a company committed to
                      creating and enhancing shareholder value for the
                   long-term. Gerber and Wilson brands are great
                         additions to our portfolio and we're very committed
                           to further building these brands in order to maximize
their potential value.    

                     We thought we'd have a little different format.
                        Rather than a lengthy prepared commentary, (I know
                           many of you have questions.) we would go to a kind of
                          a Q&A format for openers. In St. Louis Roger Joseph,
                           our Treasurer and Investor Relations VP, has received
                         a number of questions during the day and we thought
                           we would start with a response of those questions and
                        answers that we've already been asked and that may
                          cover some of the territory that we'll venture into.
                           And once we've done that, we will then open up rather
                        quickly to the audience for further questions from
you.                      

                         And if that's agreeable I'm going to ask Roger here
                          to jump in. I know we've going to have a safe harbor
                          statement necessary before we begin, and why don't I
              turn that over to you guys in St. Louis.

Thomas Pollihan:           Yes. This call is neither an offer to purchase nor a 
                       solicitation of an offer to sell shares of Gerber
                      Childrenswear. At the time the expected offer is
                  commenced, Kellwood will file exchange offer
                     materials with the U.S. Securities and Exchange
                     Commission and Gerber Childrenswear will file a
                    solicitation and recommendation statement with
respect to the offer.     

                         The exchange offer materials, including an offer to
                         purchase, a related letter of transmittal and other
              offer documents and the solicitation and
                     recommendation statement will contain important
                           information which should be read carefully before any
                           decision is made with respect to the offer. The offer
                        to purchase, the related letter of transmittal and
                   certain other offer documents, as well as the
                        solicitation and recommendation statement, will be
                  made available to all stockholders of Gerber
          Childrenswear at no expense to them.

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                                                                     KELLWOOD CO
                                                                   Res #20612241
                                                            Moderator: Hal Upbin
                                                     May 15, 2002 / 2:05 p.m. MT
                                                                          Page 3

                          The exchange offer materials, including the offer to
                         purchase, the related letter of transmittal and all
                other documents filed with the SEC and the
                         solicitation and recommendation statement will also
                   be available for free at the SEC's website at
                        www.sec.gov. Gerber Childrenswear stockholders are
                         urged to read the relevant exchange offer documents
                        and the solicitation and recommendation statement,
                           when they become available, because they will contain
                    important information that stockholders should
                   consider before making any decision regarding
tendering their shares.   

                   Statements in this call that are not strictly
                         historical are "forward-looking statements," within
                      the meaning of the safe harbor provisions of the
                        Federal securities laws. Actual results may differ
                       materially due to risk and uncertainties that are
                         described in Kellwood's Form 10-K and other filings
with the SEC.             

H. Upbin:                  Thank you. With that, between Roger and Lee, why     
                       don't we take some of the questions we've already
        been addressed earlier in the day?

Roger Joseph:              Okay. Thank you, Hal. I had a number of calls and    
                          four of the most frequently asked questions we would
                         like to cover in our opening remarks. The first one
                          has to do with what is the timetable and sequence of
                          events necessary to close the deal? And I'll ask Tom
to go through that please.

T. Pollihan:               It's expected that Kellwood will file with the SEC a 
                         form S-4 next week and commence the exchange offer.
                       It is referred to as an exchange offer because it
                          involves both cash and stock of Kellwood. The timing
                          of the actual closing will be, at best, near the end
                   of June and possibly into July. The timing is
                        dependent on the time taken for the SEC review, as
                        well as the Hart-Scott-Rodino review. The offer is
                    also subject to satisfactory completion of the
                   customary conditions in the merger agreement.

R. Joseph:                 Okay. Thank you, Tom. The next question, which I know
               everybody is interested in, what will the
                          contribution to Kellwood's sales and earnings be for
                       the current fiscal year, namely fiscal 2002 which
                           ends in January of 2003, and what is the contribution
                        to sales and earnings for next fiscal year, namely

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                                                                     KELLWOOD CO
                                                                   Res #20612241
                                                            Moderator: Hal Upbin
                                                     May 15, 2002 / 2:05 p.m. MT
                                                                          Page 4

                           our fiscal 2003? For this year, and as Tom mentioned,
                    it's difficult to pin down the exact amount of
                           accretion to earnings and sales because we don't know
                          the exact timing of when the deal will close. But we
                         estimate that sales will be enhanced in the current
                          fiscal year by approximately $80 to $100 million. In
                      terms of earnings, the deal will be accretive to
                        earnings and perhaps as much as $0.05 per share in
                      the current fiscal year. The reason it's, again,
                         difficult to pin this down - there will be purchase
                       accounting adjustments, one-time adjustments that
                      will be driven off the level of inventory and we
                           really will not know what that amount is until we get
     closer to the point of closing.

                       For next year, the next full 12 months, we expect
                       that sales from Gerber will be approximately $200
                          million, which should yield at least $100 million of
                          incremental year-to-year growth in revenue. In terms
                           of earnings per share, we will file, as Tom said, our
                          S-4 within the next week. The S-4 will show that the
                           Gerber transaction would have been accretive by $0.28
                      per share in fiscal 2001. At this time, we would
                         expect approximately the same level of accretion in
                       fiscal 2003 for the full 12 months. We'll be in a
                           better position however to address this subject after
                         we close the transaction, which, as Tom said, which
                           will probably not be until late in our second quarter
which ends in July.       

                          The next most frequently asked question is, will the
                          Gerber management continue to run the business? And,
Hal?                      

H. Upbin:                  That pause was not intended. That's the difference   
                       between St. Louis and New York, of course. As you
                       know, most of you who are familiar with Kellwood,
                         when we acquire what we call a stand-alone business
                           or a new platform of growth, which this is, certainly
                          management is, in large measure, what you're buying.
                      In this case, certainly, the brands as well. And
                        therefore we would certainly anticipate management
                        [remains] in place and helping us, we helping them
         grow the business to a new plateau.

So the answer is yes.     

R. Joseph:                 Finally, the fourth most frequently asked question   
                        has been what does Kellwood bring to the party and
                         what will Kellwood do to help grow the business and
enhance profitability?    

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                                                                     KELLWOOD CO
                                                                   Res #20612241
                                                            Moderator: Hal Upbin
                                                     May 15, 2002 / 2:05 p.m. MT
                                                                          Page 5

H. Upbin:                  And, of course, here, obviously there's the whole    
                         crux of why we had an interest in Gerber and why it
                           would make a lot of sense. We believe the transaction
                  will be a "two and two is five." I know many
                          transactions turn out to be something different than
          that. But we're very confident here.

                          First off for Kellwood, as you heard, it's accretive
                           on its face so that if nothing were done it's still a
                       very substantial business with a very substantial
                  bottom line. On the other hand, we think the
                           connection with Kellwood and its resources. It's hard
                         for a company today given the competition at retail
                          and in the general environment, as you know, to stay
                          as a medium or smaller-size company and still remain
competitive.              

                           And so we think the combination with Kellwood and our
                    ability to source perhaps more efficiently and
                        perhaps better because of our size and, because of
                       our strong balance sheet and our working capital,
                          ability to expand the businesses without limitation,
                        reasonably speaking. With our connections with, of
                           course, the who's who of retail today and our ability
                        perhaps to expand the Gerber name in retailers and
                        outlets and channels that are not now represented,
                          and we feel confident we can do that. And finally to
                      be supportive to management in terms of creating
                      value and creating additional product categories
                       through support of the Kellwood personnel in some
cases.                    

                         So all in all, we think there's a tremendous amount
                           of complementary and then strategic support here that
                         we can bring to the table. So even though it's in a
                          business that Kellwood is not now in, which is a big
                   plus of course, we won't be competing against
                       ourselves. We do, I think given the skill sets of
                         Kellwood that we'll be able to offer a great number
                        of support items that will help grow the business.

                       And I'm sure there'll be additional questions, so
                      I'll try to make that a fairly short answer, but
                          hopefully one that will give you a taste or a flavor
                    of what we see in Gerber, beyond the obviously
           dynamite brands of Gerber and Wilson.

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                                                                     KELLWOOD CO
                                                                   Res #20612241
                                                            Moderator: Hal Upbin
                                                     May 15, 2002 / 2:05 p.m. MT
                                                                          Page 6

                           Okay. And with that, and that's just a flavor of some
                         of the questions we've had so far today. With that,
                          as I mentioned earlier, I'd like to open the session
                        really now to a Q&A period where we will try to be
          responsive to any and all questions.

Operator:                  Ladies and gentlemen, if there are any questions     
                       please press the one followed by the four on your
                          push-button phone. You will hear a three-tone prompt
                           acknowledging your request. If your question has been
                          answered and you would like to withdraw your polling
                           request you may do so by pressing the one followed by
                       the three. If you are using a speakerphone please
                           pick up your handset before pressing the numbers. One
             moment, please, for the first question.

               Todd Slater with Lazard, please go ahead.

Todd Slater:               Good afternoon, guys.                                

H. Upbin:                  Hey, Todd.                                           

T. Slater:                 Congratulations.                                     

H. Upbin:                  Well, thank you.                                     

T. Slater:                 My first question is, looks like Gerber made about   
                $20 million EBIT last year. Is that right?

H. Upbin:                  About right, yes.                                    

T. Slater:                 And you believe that number will be up or down this  
year?                     

H. Upbin:                  Am I allowed to say that?                            

T. Slater:                 Directionally.  I'm not asking for an exact number.  

L. Capps:                  They provided guidance already on where they think   
                      they're going to be at. In fact, they just had a
meeting last week.        

T. Slater:                 Great.  Would you mind sharing that?                 

L. Capps:                  I don't know that we have that. We will get that.    

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                                                                     KELLWOOD CO
                                                                   Res #20612241
                                                            Moderator: Hal Upbin
                                                     May 15, 2002 / 2:05 p.m. MT
                                                                          Page 7

T. Slater:                 Okay. If we just planned Gerber flat by quarter and  
                        assume a small amount for the second quarter let's
                           say, we get about $120 million in revenues this year.
                      You guys just, I think, said to $80 to $100 if I
                         heard you correctly and I'm just wondering what the
difference is.            

L. Capps:                  No particular difference. This is Lee. No particular 
                    difference other than it depends upon when the
                         transaction closes as to when we will start to pick
up the sales.             

T. Slater:                 But I mean even if we assume no sales in the second  
                       quarter, let's say you don't close by July and we
                   assume flat revenues for the back half, we're
                          getting, I think $110. I'm just wondering do we have
                          the wrong information on last year's revenues or are
                    you projecting revenues down versus last year?

L. Capps:                  Well again I think that goes back to what Gerber has 
                          projected for the year in their revenues and I think
                        they indicated in their press release for the year
                           they'd be $200 to $210, somewhere in that time frame.
                           The bigger issue is not that we're projecting them to
                        be anything different than what they said already.
                      It's the timing of the close and the issues that
                           we'll have. I mean we're not anticipating any issues,
                       but the challenges that we'll have to get the SEC
                        review done. You know, in the current environment,
                       nothing related to Kellwood or Gerber, it is such
                         that they're going to take some time to look at it.

T. Slater:                 Okay. Maybe it reflects some conservatism on your    
part, as well?            

L. Capps:                  I would agree with that.                             

T. Slater:                 Okay.                                                

R. Joseph:                 The numbers we quoted were sort of the, if there is  
                          such a thing as a worst case in getting SEC approval
                        and the amount of time it takes to close the deal.

T. Slater:                 Okay.                                                

R. Joseph:                 I mean, if we close it 30 days sooner or--           

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                                                                     KELLWOOD CO
                                                                   Res #20612241
                                                            Moderator: Hal Upbin
                                                     May 15, 2002 / 2:05 p.m. MT
                                                                          Page 8

L. Capps:                  Yeah, no-- absolutely no--                           

R. Joseph:                 --it could be-- sales could be a bit higher.         

L. Capps:                  Absolutely no reflection or any concerns that we have
   on what Gerber has indicated.

H. Upbin:                  I think that's really the heart of your question,    
                      Todd, and I think that's the real answer that we
     don't have concerns about that.

T. Slater:                 Okay. Okay, good. And just a quick question on the   
                        international component. I understand they do some
                       athletic socks, I think, via Converse and Wilson.

H. Upbin:                  Yes.                                                 

T. Slater:                 Does that European distribution have any value for   
Kellwood outside of that? 

H. Upbin:                  Yes. Yes. In fact, again, my long-version answer to  
                          why we're interested that would have been one of the
                     issues, as well. As you know we're really not a
                      player certainly in the international scene, and
                          while this would not be major for Kellwood, it would
                          be our toe (no pun intended) our toe in the water in
                     Europe and it appeals to us. Yes, it definitely
appeals to us.            

T. Slater:                 For which of your brands or areas?                   

H. Upbin:                  Well, it's early to say. I mean, I don't think we're 
                        ready quite to say that. But there are a couple of
                         platforms that we already have. One of course would
                        be our camping company that's dabbled a little bit
                        over there and this might open some doors or might
                          facilitate that. As far as on the apparel side, we'd
                          have to really look hard and work with our divisions
                    to determine where that might make some sense.

                       That will be coming later. I think we've got some
                      other remedial things we want to focus on first.

T. Slater:                 Okay, great.  Thanks very much.                      

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                                                                     KELLWOOD CO
                                                                   Res #20612241
                                                            Moderator: Hal Upbin
                                                     May 15, 2002 / 2:05 p.m. MT
                                                                          Page 9

H. Upbin:                  Okay, Todd.                                          

T. Slater:                 Good luck.                                           

H. Upbin:                  Thank you.                                           

L. Capps:                  After follow-up on your question, we agree with your 
                     estimate of what they're looking at for EBITDA.

T. Slater:                 You agree with my estimate and up or-- directionally 
up or down?               

L. Capps:                  You had indicated, the first part of your question   
                   was that it was around $20 million of EBITDA.

T. Slater:                 Yes.                                                 

L. Capps:                  --and---                                             

T. Slater:                 Is that EBIT or EBITDA?                              

L. Capps:                  EBIT.                                                

T. Slater:                 Yes.                                                 

L. Capps:                  And that's what our indication is.                   

T. Slater:                 Yes, for this year as well?                          

L. Capps:                  Yes.                                                 

T. Slater:                 I see. Okay, so flat EBIT. Okay. All right. Great.   
Thanks.                   

Operator:                  Jeff Edelman with UBS Warburg, please go ahead.      

Jeff Edelman:              Thank you. Hal, there's not a lot of public          
                        information readily available and I was out of the
                         office this morning when this occurred. But pulling
                           up some data, it looks as if the company's sales have
                           been in a steady decline over the last several years.

H. Upbin:                  Yes, that's--                                        

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                                                                     KELLWOOD CO
                                                                   Res #20612241
                                                            Moderator: Hal Upbin
                                                     May 15, 2002 / 2:05 p.m. MT
                                                                         Page 10

J. Edelman:                Could you sort of discuss what was behind that?      

H. Upbin:                  Yes. Obviously, in part of our due diligence there we
                      focused on that. As part of our due diligence we
                       engaged an outside consultant firm to do a market
                   study, which is a fancy way of saying we were
                  investigating the relationships with the key
                           retailers and the product categories and where it fit
                          in vis-a-vis the competition and so on, and we had a
                       very thorough review done. And in that regard, we
                        satisfied ourselves that it was not terminal. That
                       the erosion came more from and, of course, Gerber
                       management initially put this forth, that it came
                    more from getting out of certain categories of
                       products that they were not competitive with at a
                        point in time. And part of that, I think, was they
                           were sourcing primarily from their own facilities and
                         there were some issues which we think going forward
can change.               

                        We also think, meaning we will get back into, with
                       management of Gerber, certain of those categories
                        once again. And additionally we think that there's
                         opportunity to expand the business in channels like
                          the warehouse clubs or like the drugstore chains and
                so on that they're not now represented in.

                    So first and foremost we're satisfied that the
                        erosion was quote "a one-time type of erosion" and
                      that it's endemic into any basic issues with the
brand or with the product.

J. Edelman:                Okay. Roughly, how does it break down between        
children's wear and socks?

H. Upbin:                  It's roughly 70-30. 70% children's wear; about 30%   
socks.                    

J. Edelman:                It appears as if most people selling commodity       
                    products like socks and/or selling to the mass
                      channel typically have a lower operating margin.
                           Theirs looks fairly impressive; I guess almost double
                           yours. What have they been doing differently and why?
                      What produces that kind of profitability? Or was
                      there something unusual in the numbers from last
year?                     

H. Upbin:                  I couldn't. I can't answer that really readily in    
                           this conference call. Obviously, there is a belief on
                        our part that there's some opportunity there given

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                                                                     KELLWOOD CO
                                                                   Res #20612241
                                                            Moderator: Hal Upbin
                                                     May 15, 2002 / 2:05 p.m. MT
                                                                         Page 11

                        their connection with Kellwood that we can perhaps
                       eliminate some of those costs or do some of those
                   things more efficiently. But there is nothing
                         untoward or unusual about the operation, per se, in
the socks side.           

L. Capps:                  They've been able to historically get those margins, 
                          and they've done a good job of maintaining them even
               though the sales have been somewhat down.

J. Edelman:                Okay. What has been the underlying growth of their   
                       basic business excluding the businesses that they
liquidated?               

H. Upbin:                  Andy here unless Lee or--                            

L. Capps:                  Well, it's nominal growth. In fact, you know, with   
                         the current environment in the last 12 to 14 months
                       it was down slightly on the base business but not
significantly.            

H. Upbin:                  I think they suffered as [much] as we did in the near
                       term, the last period or two, obviously, from the
general climate.          

R. Joseph:                 Jeff, if you go back -- this is Roger -- to 1999     
                          versus 2000 sales of the company went from $278 down
                          to $259 yet the EBITDA and here I'm adding back -- I
                     have depreciation added back, stayed around $30
million.                  

J. Edelman:                Okay.                                                

R. Joseph:                 That is reinforcing what Lee said, their withdrawal  
              from certain unprofitable product lines.

J. Edelman:                Okay.                                                

R. Joseph:                 So the base business has consistently generated a    
                      double-digit return on sales I think principally
         because of the equity of the brand.

J. Edelman:                 Okay. Yes, definitely it's a really -- it was an    
                           impressive return in a business that people typically
                        don't get such high a returns on. Okay. Thank you.

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                                                                     KELLWOOD CO
                                                                   Res #20612241
                                                            Moderator: Hal Upbin
                                                     May 15, 2002 / 2:05 p.m. MT
                                                                         Page 12

R. Joseph:                 -- birth rate is, but the growth of the market is    
                         pretty consistent with the birth rate in the United
           States which is fairly low right now.

L. Capps:                  Consistent 4 million births a year, every year,      
year-in and year-out.     

J. Edelman:                Right.                                               

R. Joseph:                 So it's a nice annuity on which I think we can with  
                      guidance from Gerber management look for ways to
grow.                     

H. Upbin:                  Yes, I guess that was my -- what I was trying to     
                        respond, Jeff, was to say as good as it is I think
                      there's even opportunity perhaps to even enhance
that.                     

J. Edelman:                Okay.  Thank you.                                    

Operator:                  Susan Sansbury with Sassafras Capital, please go     
ahead.                    

Susan Sansbury:            Yes. I have a couple of questions. First, this is a  
                       point of clarification. I just want you to verify
                    that you have signed a definitive agreement to
                          acquire this company and not signed just a letter of
intent.                   

H. Upbin:                  No, no.  We have signed a definitive agreement.      

S. Sansbury:               Okay. Second question is, have you entered into an   
                           employment contract with Ed Kittredge and, if so, for
how long?                 

H. Upbin:                  We will be signing. We haven't now, no.              

S. Sansbury:               Okay.  But you haven't, but you intend to?           

H. Upbin:                  We have an agreement with Ed Kittredge on terms of   
employment.               

S. Sansbury:               Okay.                                                

H. Upbin:                  If you're asking will he be around. Yes, he'll be    
around.                   

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                                                                     KELLWOOD CO
                                                                   Res #20612241
                                                            Moderator: Hal Upbin
                                                     May 15, 2002 / 2:05 p.m. MT
                                                                         Page 13

S. Sansbury:               Okay. What are you going to do with the cash? They   
                        have over $40 million in cash and what you do with
                that is that instrumental in terms of your
                      calculation of the level of accretion? The other
                    question is this company's spent a lot of time
                           transferring or changing their sourcing from domestic
                           to U.S.-- I mean, domestic to overseas. Do you expect
                       to do any additional changes in terms of sourcing
                          and/or do you expect to spend any significant amount
    of money to grow the top line?

H. Upbin:                  Okay, let me--                                       

L. Capps:                  Let me answer. I'll answer the first one on the cash.
                           The cash obviously is a positive impactor on this but
                           it doesn't have, does not have a direct impact on the
                         accretion. We have cash already in the company. Our
                          balance sheet is a lot stronger than it was, than it
                         has been in a long time. So the fact that they have
                       cash really has a very small impact on what we're
     projecting the accretion to be.

H. Upbin:                  Really, money is fungible and as of, Roger, what was 
       it last month, some $140 million?

R. Joseph:                 At least $150 by the time-- In April a year ago, we  
had $26 million of cash.  

H. Upbin:                  So, Susan, it's a very different picture.            

R. Joseph:                 And low.                                             

H. Upbin:                  So that that $40 becomes fungible with the balance of
                    funds, so that's why Lee's answer is certainly
accurate.                 

                      On the other side, we do think, and again, while
                           we've done due diligence, obviously, and we've talked
                         with management and both management has already had
                          plans to do some further sourcing and enhancement of
                        the bottom line, hooking up with Kellwood can only
                        more enhance those plans. So the answer is yes for
                     the current business and additional incremental
                          businesses that we would hook up with management and
                        we would be helpful in a way that we could enhance
                          the sourcing capabilities of Gerber as a stand-alone
    versus being part of Kellwood.

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                                                                     KELLWOOD CO
                                                                   Res #20612241
                                                            Moderator: Hal Upbin
                                                     May 15, 2002 / 2:05 p.m. MT
                                                                         Page 14

S. Sansbury:               One final question is sort of technical. In this     
                         press release you said that you will acquire Gerber
                    in a stock/cash transaction, blah, blah, blah,
                      subject to a formula, the share portion which is
                  subject to a formula set forth in the merger
                         agreement. Can you elaborate on that at this point,
                         or do we have to wait until the merger agreement is
filed?                    

H. Upbin:                  My collar expert formula is Lee Capps. I wouldn't    
even try to tackle it.    

L. Capps:                  The formula always equates to $6.85 and, for the most
                        part, until-- you know, we don't really anticipate
                          this to happen, but if the stock were to-- our stock
                          were to drop below $20, then we would supplement the
                         amount of stock with cash so that the formula might
                          change to a certain extent under $20. But above $20,
                           it's 50/50 cash and stock. We're just adjusting stock
                      to ensure that it's $6.85 proceeds to the Gerber
shareholders.             

S. Sansbury:               Okay. And this really is the final question. When you
                         look at Gerber, and I may know it better than other
                    people, but they have an Irish operation where
                         currency is a major issue. Are you guys comfortable
                        with the extent of their currency exposure? And do
                          you intend to manage it any differently than they've
       been able to or not been able to?

H. Upbin:                  Well, I mean, Roger might want to answer that in     
                        terms of any hedging requirement, but it is a very
                         modest size versus the rest of the whole operation.
                        The Ireland part of the business is fairly modest.

S. Sansbury:               It has a significant affect on their tax rate,       
quarter to quarter.       

H. Upbin:                  Roger, if you want to respond to that?               

L Capps:                   Well, I'll go ahead and jump in. Again, it's a modest
                  operation, $15 to $20 million is what it is.

H. Upbin:                  Yes.                                                 

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                                                                     KELLWOOD CO
                                                                   Res #20612241
                                                            Moderator: Hal Upbin
                                                     May 15, 2002 / 2:05 p.m. MT
                                                                         Page 15

L Capps:                   I've looked at it. We're comfortable with the        
                           exposure. Again, obviously the impact on the tax rate
                          for us would be less significant because it would be
                         combined with a larger group. We are in the process
                       of looking at tax planning aspects of the Ireland
                           operation and also to see what can be done to make it
            a more meaningful piece of the puzzle.

S. Sansbury:               Okay, great.  Thanks very much.                      

Operator:                  Julia Grice with Amajac Capital, please go ahead.    

Julia Grice:               Thank you. Does GCW have to get a fairness opinion or
                    have they already received one for this offer?

H. Upbin:                  They have already received one for this offer, yes.  

J. Grice:                  And I guess the question I have is, looking at the   
                          valuation for what you're paying to buy the company,
                          what's wrong with Gerber Childrenswear? Why are they
                 selling themselves to you so inexpensively?

H. Upbin:                  Well, obviously I don't think there's anything wrong 
                        with it. I think it's a wonderful company. I think
                          it's a wonderful opportunity for us and I think it's
                       a wonderful opportunity for them. But I think you
                        need to ask them that question if you want to know
from their side.          

J. Grice:                  And how long did you do due diligence?               

H. Upbin:                  We did due diligence for four months? Three months?  
                  Three months or so. Intensive due diligence.
                         Marketing studies, independent audit - our auditing
                        people, legal due diligence. We have a reputation,
                           well earned, for probably being very studious when it
                      comes to analyzing a target company, and we have
                      spent a lot of time on the due diligence. We had
                people over to Ireland, into their plants.

                           We have not, think we have not missed a trick and I'm
                        sure they will tell you the same thing. And we are
                          very satisfied with the opportunity going forward in
                       the unique sense that we bring a lot to the table
                        that others might not, and I believe they feel the

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                                                                     KELLWOOD CO
                                                                   Res #20612241
                                                            Moderator: Hal Upbin
                                                     May 15, 2002 / 2:05 p.m. MT
                                                                         Page 16

                           same way, that hooking up with us -- and I don't want
 to really speak for them --

J. Grice:                  Well, I can say that as a Gerber Childrenswear       
                           shareholder that this seems like a raw deal for us in
                     that you don't give us any upside to your stock
                         because you're capping us out at a fixed price and,
                      on top of that, the valuation you're paying is--
            seems to be basically highway robbery.

H. Upbin:                  Well, we appreciate your comments. But, again, I     
                 think you ought to take that up with Gerber
                           management and the board who-- the proposal, not with
Kellwood. Thank you.      

L. Capps:                  Can we move on to the next question?                 

Operator:                  Ladies and gentlemen, if there any additional        
                         questions please press the one followed by the four
                         at this time. Ray Holton with Shorewater, please go
ahead.                    

Ray Holton:                Yes, hi. Just two things. One, I'm wondering if      
                       there's a break fee for this transaction? And the
                      second one is, is there going to be an averaging
                      period to calculate the amount of stock we'll be
                         receiving or is it just sort of fix the stock price
               on a certain date to calculate the 50/50?

L. Capps:                  I'll jump in on that. There is a break fee of $5     
million.                  

R. Holton:                 Okay.                                                

L. Capps:                  Secondly, as far as the stock is concerned during the
                        tender period the stock is averaged over an 18-day
                         period ending two days before the end of the tender
offer.                    

R. Holton:                 Great.  Thank you.                                   

H. Upbin:                  You're welcome.                                      

Operator:                  Gentlemen, I am showing no further questions at this 
time.                     

H. Upbin:                  Well, all right then. If there are no other          
                         questions, I want to thank all of you for attending
                        the conference call. And again, just end by saying

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                                                                     KELLWOOD CO
                                                                   Res #20612241
                                                            Moderator: Hal Upbin
                                                     May 15, 2002 / 2:05 p.m. MT
                                                                         Page 17

                      we're excited by the acquisition. We know Gerber
                         management is excited about the acquisition, and we
                        believe it'll be-- going forward, it'll be a very,
                           very positive addition to the Kellwood portfolio. And
I thank you very much.    

Operator:                  Ladies and gentlemen, that does conclude your        
                      conference for today. You may all disconnect and
  thank you for participating.

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       On May 24, 2002, Kellwood Company issued the following press release:

[LOGO]
KELLWOOD
NEWS RELEASE

KELLWOOD (NYSE:KWD) AND GERBER CHILDRENSWEAR INC. (NYSE:GCW)
ANNOUNCE COMMENCEMENT OF EXCHANGE OFFER FOR GERBER COMMON STOCK 

ST. LOUIS, MO, May 24, 2002 - Cradle, Inc., a Delaware corporation and a        
wholly-owned subsidiary of Kellwood Company, today announced that it has        
commenced an exchange offer for any and all outstanding shares of Gerber        
Childrenswear, Inc. common stock for cash and common stock of Kellwood, pursuant
to the terms of its previously executed merger agreement with Gerber.           

        Under the terms of the exchange offer, Kellwood is offering to acquire
all outstanding shares of common stock of Gerber for at least $3.42 in cash and 
a fraction of a share of common stock of Kellwood, together having a value based
on the formula described in the offering documents of $6.85 for each share of   
Gerber common stock. The exact ratio of cash and stock will not become fixed    
until two trading days before the exchange offer--which may be                  
extended--expires. The exchange offer is scheduled to expire at 12:00 midnight  
New York City Time on Friday, June 21, 2002, unless extended.                   

        The Gerber Board of Directors, by unanimous vote of all the directors,
upon the terms and conditions set forth in the merger agreement, has (i)        
determined that each of the Offer and the Merger, taken together as integral    
steps of a single plan of reorganization, is fair to, and in the best interests 
of the stockholders of Gerber, (ii) approved the Merger Agreement and the       
transactions contemplated thereby, and (iii) recommended acceptance of the Offer
and adoption of the Merger Agreement by the stockholders.                       

    The exchange offer is subject to certain conditions, as more fully
described in the merger agreement, including the condition that shares          
representing at least 70% of the Gerber voting common stock on a fully diluted  
basis are tendered and not withdrawn in the exchange offer.                     

        American Stock Transfer & Trust Company is the depositary and exchange
agent and Innisfree M&A is the information agent for the exchange offer.        
Kellwood's information agent has set up a toll-free number, 1-888-750-5834, for 
questions relating to the exchange offer and for current information about the  
number of shares of Kellwood common stock exchangeable for each share of Gerber 
common stock.                                                                   

       This release is being filed pursuant to Rule 425 under the Securities
Act of 1933. This announcement is neither an offer to purchase nor a            
solicitation of an offer to sell shares of Gerber. Gerber stockholders are urged
to read the relevant exchange offer documents because they contain important    
information that stockholders should consider before making any decision        
regarding tendering their shares. Kellwood has filed exchange offer materials   
with the SEC and Gerber has filed a solicitation/recommendation statement with  
respect to the offer.                                                           

-More-

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[LOGO]
KELLWOOD

Add One                                                                         

The exchange offer materials (including a Preliminary Prospectus, a related     
letter of transmittal and other offer documents) and the                        
solicitation/recommendation statement will be provided to each Gerber           
stockholder and will contain important information, which should be read        
carefully before any decision is made with respect to the offer. The Preliminary
Prospectus, the related letter of transmittal and certain other offer documents,
as well as the solicitation/recommendation statement, are available to all      
stockholders of Gerber at no expense to them by contacting the information      
agent, Innisfree M&A, 501 Madison Avenue, 20th Floor, New York, New York 10022, 
at 1-888-750-5834. The exchange offer materials (including the Preliminary      
Prospectus, the related letter of transmittal and all other documents filed with
the SEC) and the solicitation/recommendation statement are also available for   
free at the SEC's website at www.sec.gov.                                       

     Celebrating 40 years of value, fashion and diversity, Kellwood is a
$2.1 billion marketer of apparel and consumer soft goods. Kellwood specializes  
in branded as well as private label products, and markets to all channels of    
distribution with product specific to a particular channel. Kellwood brands     
include Sag Harbor(R), Koret(R), Jax(R), David Dart(R), Democracy(R), David     
Meister(TM), Dorby(TM), My Michelle(R), Vintage Blue(TM), EMME(R), Bill         
Burns(R), David Brooks(R), Kelty(R), and Sierra Designs(R). EMME(R) and Bill    
Burns(R) are produced under licensing agreements. For more information about    
Kellwood, visit Kellwood's website at www.kellwood.com.                         

        Gerber Childrenswear, Inc. is a leading marketer of infant and toddler
apparel and related products, which it offers under its flagship licensed brand,
Gerber(R), as well as the Baby Looney Tunes(TM), Curity(R), and Little Suzy's   
Zoo(R) licensed brand names and the Onesies(R) trademark. The Company is the    
leading provider of these products to volume retailers, and also distributes to 
mid-tier department stores and specialty retailers. Its hosiery subsidiaries,   
Auburn Hosiery Mills Inc. and Sports Socks Company (Ireland) Limited,           
manufacture, market and sell branded sport socks for men, women, and children   
under licensed brand names such as Wilson(R), Coca-Cola(R) and Converse(R). For 
more information about the products of Gerber Childrenswear, visit Gerber       
Childrenswear's website at www.gerberchildrenswear.com.                         

Statements in this press release that are not strictly historical are           
"forward-looking" statements within the meaning of the safe harbor provisions of
the federal securities laws. Actual results may differ materially due to risks  
and uncertainties that are described in Kellwood's Form 10-K and other filings  
with the SEC.                                                                   

 ###

FINANCIAL CONTACT: Roger D. Joseph, VP Treasurer & IR, Kellwood Company,        
314.576.3437, Fax 314.576.3325 or roger_joseph@kellwood.com. W. Lee Capps III,  
Senior Vice President Finance & CFO, Kellwood Company, 314.576.3486, Fax        
314.576.3439 or wlc@kellwood.com. Corporate Office: 600 Kellwood Parkway,       
Chesterfield, Missouri 63017.                                                   

MEDIA CONTACT: Donna Weaver, VP Corporate Communications, Kellwood Company,     
212.575.7467, Fax 212.575.5339 or donna.weaver@kellwood.com. Executive Office:  
120 West 45th Street, 27th Floor, New York, New York, 10036.                    

Dates Referenced Herein   and   Documents Incorporated By Reference

				Referenced-On Page
This 425 Filing		Date		First		Last			Other Filings
		5/15/02		1		17			425
Filed On / Filed As Of		5/24/02		1		18			SC 14D9, SC TO-T
		6/21/02		18					10-K/A, 8-K
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