UPDATE 4-"Business as usual" despite debt deadline-Kellwood

* $140 million bond offer expires Wednesday

* Kellwood says still delivering to customers on time

* Kellwood says still negotiating on maturing bonds (Adds no comment from Dillard's)

By Alexandria Sage

SAN FRANCISCO, July 13 (Reuters) - Kellwood Co [KWD.UL], one of the largest U.S. apparel makers, said on Monday it was "business as usual" at its operations as it tries to it extend the maturity date of $140 million in bonds that come due midnight Wednesday.

Kellwood, a major department store supplier with brands including Phat Farm, Baby Phat, Sag Harbor and XOXO, is trying to forestall the looming debt deadline after Deutsche Bank AG (DBKGn.DE), the largest holder of the securities, backed out of an exchange offer on Friday.

Kellwood stressed that it was continuing to supply its retail customers and that the challenge faced by the profitable company was a debt maturity date issue, not an operational one.

Eric Hunter, the senior vice president of marketing for Kellwood, called it "business as usual" with the company's retail customers, stressing that Kellwood was profitable and "operationally well-run."

Hunter said he could not speculate on what would occur if a deal was not reached by the Wednesday deadline, expressing frustration at Deutsche Bank, which he said did a "complete 180" while citing internal reasons for backing out.

The failed deal involved an exchange of bonds for ones that would expire in 2014.

"It makes no sense," Hunter said, speaking of Deutsche Bank's change of heart. "They built the offer. They had given us nothing but a thumbs up the entire time."

Kellwood hired Lazard (LAZ.N) a few months ago to assist in restructuring its debt, Hunter said.

Deutsche Bank spokesman John Gallagher declined comment.

Kellwood, which Sun Capital Partners took private in 2008, is looking at ways to strengthen its long-term financial position as it continues to negotiate with bondholders, said Chief Executive Michael Kramer, who became CEO 10 months ago.

"This comes at a time when Kellwood is performing well, is profitable and has a positive cash flow," said Kramer in a statement.

LIMITED RETAIL IMPACT?