VF Corp. is beefing up its contemporary sportswear coalition.
The Greensboro, N.C.-based manufacturing giant has acquired one-third of the capital stock of Mo Industries Holdings Inc., owner of the Splendid and Ella Moss women's labels. Terms of the deal were not disclosed, but the acquisition agreement includes a provision allowing VF to acquire the remaining stock early next year.
"We've stated our intent to grow in the women's contemporary sportswear area, and both the Splendid and Ella Moss Brands have demonstrated impressive growth and the ability to attract a loyal consumer following through superior products," said Mike Egeck, president of VF contemporary brands.
VF's contemporary brand coalition was founded in July when the company acquired premium denim brand Seven For All Mankind and women's active lifestyle company Lucy Activewear for an estimated $885 million. Egeck, then chief executive officer of Seven, who had been a VF executive before joining the premium denim firm, was named head of the division.
"Our vision for these brands is to continue their development with the addition of more products, expanded international distribution and deeper penetration with our existing U.S. retailers," said Moise Emquies, ceo and president of Mo Industries.
The Splendid and Ella Moss brands have seen revenues triple since 2004, generating a volume of more than $80 million last year.
"The deal is a good one for Mo Industries because VF brings a lot to the table, such as its complementary brands like Seven For All Mankind and its experience with global brands," said Fred Schmitt of Sage Group, the investment bank that represented Mo Industries in the transaction.
He said Mo Industries has a strong wholesale business and opportunities to expand into different product categories and in direct distribution. Splendid's and Ella Moss' products, such as tops, complement Seven's bottoms, providing possible synergies to VF's operations, he added.
Schmitt said Mo Industries is a "highly profitable" firm that is also "fast growing."
The current management team will stay on with the company, the banker said.
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