NEW YORK — Liz Claiborne Inc. added another brand to its portfolio on Thursday, acquiring two-year-old C & C California Inc. for an initial price of $28 million.
The cost, which represents 60 percent of C & C’s initial valuation, is subject to additional payments in the 2007, 2008 and 2009 fiscal years that will be based on a multiple of C & C’s earnings in each year. The company, which primarily manufactures premium apparel for women through its C & C brand, generated net sales of $21 million in the 2004 fiscal year, according to Liz Claiborne.
Los Feliz, Calif.-based C & C recently launched lines for men and children, but its women’s products account for 96 percent of total sales. The target base is women between 18 and 45, as well as Baby Boomers.
C & C products are sold at select specialty stores such as Scoop, Barneys New York and Ron Herman, as well as department stores, including Neiman Marcus, Saks Fifth Avenue, Nordstrom, Bloomingdale’s and Macy’s West. Known for its signature T-shirt collection, the company — predicted in some fashion circles to be the next Juicy Couture — this year plans to launch an expanded product line that will feature casual sportswear such as denim-related product and woven items, including pants, shirts and skirts.
C & C co-founders Claire Stansfield and Cheyann Benedict will stay with the firm as co-presidents.
The company “is one of the most successful new brands in the contemporary zone, an area we have found to be particularly attractive,” Paul Charron, chairman and chief executive officer of Liz Claiborne, said in a statement,
Charron said the acquisition provides Liz Claiborne with additional channel diversification, and noted that C & C has “significant organic growth potential in its signature T-shirt line and will rapidly evolve into a full lifestyle collection of casual sportswear items. We also feel there are abundant brand extension opportunities in nonapparel categories, as well as in licensing and additional international distribution.”
Frederick Schmitt of investment banking firm Sage Group, which represented C & C in the deal, said its financial structure is an arrangement that Liz Claiborne has used before, including its acquisition of contemporary brand Juicy Couture, also a client of Sage’s.“Claire and Cheyann chose Liz because the apparel firm has demonstrated an ability to work well with entrepreneurs and still successfully grow their businesses, which is unique in the apparel world,” Schmitt said.
Sage approached Stansfield and Benedict about three months ago about the possibility of shopping the company.
“They really believed in the brand and all along Sage thought Liz Claiborne was the perfect fit,” Stansfield said. “We really felt that way once we had dinner with them in New York. There’s just amazing women over there and it felt like home. It didn’t feel so corporate.”
Stansfield and Benedict’s goal has always been to seek acquisition of C & C, just not this soon. “Cheyann and I started the company wanting this to happen,’’ Stansfield said. “We had a five-year plan about it, but we’re very excited it happened in our second year. We really wanted to become a global brand [and] we really wanted to come out with new products. We’re just ecstatic all of our ideas are going to come to life.”
While plans already are under way for the brand to introduce denim and cashmere for fall, T-shirts will always remain its core category, the co-founders said. C & C ships some 100,000 T-shirts a month. By adding patterns and different fabrics to even just that category, along with the expanded international distribution, the potential for growth is great.
“We have a big wish list of products and categories we want to manifest soon,” Benedict said.
— With contributions from Rose Apodaca, Los Angeles
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