In a reshuffling of officials at one of L.A.'s largest apparel manufacturers, Gerard Guez is stepping down as chief executive of Tarrant Apparel Group.

Guez, who in 1988 founded the company that manufactures blue jeans for large chain stores, will remain chairman. "To me it's a step up, not a step down," he said. "Sometimes you have to pass the baton to have a freer mind."

Eddy Tak Yu Yuen, 46, was named new chief executive. He has been with the company for 17 years, most recently as president of Tarrant Mexico.

Weeks before the corporate realignment was announced, Guez bought 70,400 shares of Tarrant stock between Sept. 17 and Sept. 24 for between $4.79 and $5.37 a share, bringing his total holdings to 5.59 million shares. He now owns nearly 40 percent of the $400 million company.

Guez said he will concentrate on growing the company, including looking at mergers and acquisitions or a separate corporate entity. "I am looking to fully utilize what we have, develop this business and start growing again, which is the only thing we haven't done lately."

Scott Briskie, the company's chief financial officer, said that Guez's time would now be freed up to focus on strategic and long-term planning. "There are always new opportunities around the corner," Briskie said.

Guez has been aggressively moving manufacturing operations to Mexico. In March, the company purchased a sewing plant in Ajalpan, Mexico, to eliminate the reliance on third-party sewing contractors. Tarrant, which makes primarily private label clothing for such clients as The Limited and Target, manufactures 50 percent of its products in the 12 textile and manufacturing plants it owns in Mexico.

"The upside to having facilities is that you can control the manufacturing process and your cost margins should be better," said John Rouleau, an analyst who has followed the company for three years. "The downside is you have a lot of fixed costs and you have to keep those facilities and machines and people productive."

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