VF Corp., which first acquired one-third of Mo Industries Inc. capital stock last June, has purchased the remaining two-thirds of the Los Angeles-based firm, which owns the Ella Moss and Splendid contemporary brands.
This story first appeared in the March 13, 2009 issue of WWD. Subscribe Today.
The Greensboro, N.C.-based VF has acquired the firm from its founder, Moise Emquies, and Summit Partners, a private equity and venture capital company. VF is paying $161 million for the remaining two-thirds of Mo Industries, plus the repayment of $47 million in existing net debt, which will be funded through VF’s cash flow from operations. The acquisition agreement in June included a provision allowing VF to acquire the remaining stock in early 2009.
“Up until now we have been talking in broad terms about the growth of these brands,” said Mike Egeck, president of VF’s contemporary brands coalition. “We see a lot of opportunity to expand internationally, and VF has a lot of the infrastructure there so we can do that.”
In addition to closing the deal on Thursday, Egeck said the group has signed a lease for the first freestanding Splendid store on Robertson Boulevard in Los Angeles. The store, Egeck said, will house the women’s, men’s and children’s collections. VF hopes to open the store sometime in the third quarter.
Emquies, who has been serving as chief executive officer and president, will continue with the company as founder and ceo, reporting to Egeck. Jonathan Saven, who has been chief financial officer and chief operating officer, has been promoted to president. Pamella Protzel Scott will continue in her role as creative director for both brands.
According to VF, adding these brands to the portfolio should contribute approximately $70 million to 2009 revenues and be slightly accretive to earnings per share; these expectations were incorporated into VF’s revenue and earnings guidance provided on Feb. 10. VF said it expects the brand’s long-term revenues to grow 10 percent to 15 percent annually.
Splendid and Ella Moss are primarily sold in high-end specialty stores and better department stores such as Bloomingdale’s, Barneys New York, Neiman Marcus, Shopbop.com, Nordstrom and Saks Fifth Avenue. Combined revenues of the two brands were $95 million in 2008.
Other companies in VF’s contemporary brands coalition include the Seven For All Mankind and Lucy brands, which were both acquired in July 2007 for an estimated $885 million, and John Varvatos men’s sportswear.