NEW YORK — One of fashion's biggest duels has been resolved.
On Sunday, Polo Ralph Lauren Corp. and Jones Apparel Group Inc. reached a settlement over the lawsuits each had filed against the other in 2003. As part of the agreement, Polo is buying back the Polo Jeans business of women's and men's casual apparel and sportswear in the U.S., which was licensed to Jones.
Polo is acquiring the Jones subsidiary Sun Apparel Inc., which primarily manufactured and distributed Polo Jeans, the company told WWD exclusively. It will pay Jones about $355 million for Sun and to resolve the outstanding litigation and claims. The amount is subject to any closing adjustments, but the deal is expected to be completed in the next few weeks.
The two companies are expected to announce the settlement today.
"Over the past few years we have been taking more direct control of our brands," Ralph Lauren, chairman and chief executive officer of Polo Ralph Lauren, said in a statement. "Buying back Polo Jeans is a continuation of that long-term strategy and gives us the ability to develop our denim business to its fullest potential. We have the world-class design, marketing and advertising expertise to take this business to the next level as we continue to grow on a global basis."
Peter Boneparth, president and chief executive officer of Jones Apparel, said in a Jones statement: "We are very pleased to resolve these outstanding matters. This agreement will allow Jones Apparel to focus all of its energy and resources on pursuing its strategic plan to enhance shareholder value. The Polo Jeans license imposed certain operating restrictions on Jones Apparel, including the sale of certain competing product. Additionally, we recognize it also created uncertainty due to Polo Ralph Lauren Corp.'s contractual right to acquire the license in 2010 at 80 percent of fair market value."
UBS Investment Bank served as Polo's financial advisor in the transaction, while Bear, Stearns & Co., Inc. advised Jones. Polo's legal counsel was Paul, Weiss, Rifkind, Wharton & Garrison LLP, while Jones' was Cravath, Swaine & Moore LLP.
Sun also has a small private label business, which Polo is not buying.
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