TOKYO—Sanei International and Tokyo Style announced Thursday that they plan to merge their operations and become Japan’s third-largest clothing manufacturer.
The companies said they plan to establish a new joint-holding company called TSI Holdings, on June 1, 2011, in order to draw upon each other’s strengths in an increasingly competitive industry.
Sanei International produces apparel for the Japanese market and distributes international brands such as Kate Spade, Jill Stuart, Diane von Furstenberg and Vivienne Tam in Japan. Similarly, Tokyo Style produces some Japanese apparel brands and distributes brands like Haute Hippie and Nanette Lepore.
Sanei International’s annual sales total 100.33 billion yen, or $1.23 billion, at current exchange rates. Tokyo Style’s annual sales are 52.2 billion yen, or $637.77 million.
One Sanei share will be converted into one TSI Holdings share while 1.65 shares of Tokyo Style will be converted to one share of TSI Holdings. Both companies are listed on the Tokyo stock exchange.
Chairman of Sanei International’s board of directors Masahiko Miyake will become chairman of TSI Holdings, while Tokyo Style president Yoshiki Nakajima will become president of the new company.
Nakajima said at a press conference Thursday that he hopes the holding company will achieve yearly sales of 300 billion yen, or $3.67 billion, by the year 2016. The executives also expressed their desire to become more international fashion players.