NEW YORK — Caché Inc. has agreed to acquire Adrienne Victoria Designs, its largest supplier, the company said Wednesday. The deal is to close around June 30.
The acquisition came as the company announced that first-quarter earnings plummeted 91 percent, hurt by soft sportswear sales. The sportswear fashion misses led to higher markdowns and marketing expenses, the company said.
But the purchase of Adrienne Victoria Designs "represents an important strategic fit for us, as it significantly advances our direct sourcing and manufacturing efforts and expands our talent in design, production and merchandising," Brian Wolfe, chairman and chief executive officer, said in a statement.
"This acquisition creates a vertical platform for Caché. Adrienne and Robert Kantor, [AVD] founders, are extremely talented people who will join the Caché team and continue to run the company," said Gilbert Harrison, chairman of investment banking firm Financo Inc., which represented Caché.
The deal will help Caché, owner and operator of specialty stores selling sportswear, eveningwear and accessories, with its next growth phase, which includes its Caché Luxe concept, Harrison said. Marketing Management Group represented Adrienne Victoria Designs.
Caché said that income for the quarter ended March 31 plunged to $145,000, or 1 cent a share, from $1.7 million, or 11 cents, in the year-ago period. Sales inched up by 0.8 percent, to $64.4 million from $63.8 million, and total same-store sales gained 3 percent.
Because of a $1.8 million jump in marketing costs, operating expenses increased to $29.5 million from $26.9 million last year.
The company said it expected second-quarter diluted earnings per share in the range of 20 cents to 24 cents, on estimated sales of $73 million to $75 million. Full-year 2007 diluted EPS are expected in the range of 75 cents to 80 cents, on sales of between $284 million and $294 million.
“I see things on the hanger and I’m, like, ‘I never knew that color worked on me.’ It’s things you necessarily wouldn’t choose to wear, but once you put them on, you see why Janie is who Janie is." — Lily Collins on working with former "Mad Men" costume designer, Janie Bryant on creating looks for her role as Celia Brady's in Amazon series, "The Last Tycoon." 📸@jilliansollazzo #wwdeye
EXCLUSIVE: Sarah Rutson has been tapped to Build New American Fashion Group. The parent of Joie, Equipment and Current/Elliott hired the merchant to rev up its brands and expand its portfolio into designer, beauty and lifestyle categories. Read more on WWD.com, link in bio. #wwdfashion
Michael Kors' $1.3B Jimmy Choo deal has the company squaring off with Coach Inc. as both seek to build American powerhouses. Coach bought Stuart Weitzman in 2015 and Kate Spade just two weeks ago, but Michael Kors' acquisition may be putting pressure on its rival in the new push for scale. #wwdnews (📷: George Chinsee)
Meet actress Lucy Boynton, who plays opposite Naomi Watts in the recently released Netflix series "Gypsy." Boynton stopped by WWD to talk about her upcoming projects and her nomadic lifestyle. Get all the details on WWD.com. #wwdeye (📷: @dandoperalski)