CONVERSE WILL ACQUIRE APEX; PROFITS UP 9.1%

NEW YORK--Converse Inc. has signed a definitive agreement to acquire Apex One Inc., a footwear and professional sport licensed-apparel company that had sales of $100 million last year.
Converse, based in North Reading, Mass., will pay $31 million, plus 1.75 million warrants to purchase Converse shares at $11.40 per share over the next five years.
Converse said Apex will complement its small apparel lineup and give it expanded distribution and access to the logos of various professional sports leagues.
Separately, Converse said strong sales of its Chuck Taylor "athleisure" collection of women's and men's footwear and sports apparel and a robust international performance boosted operating profits by 9.1 percent in the first quarter ended April 1, on a 6.7 percent rise in sales.
Operating profits grew to $17.1 million from $15.7 million a year ago. A rise in interest expense cut the gain in net profits by 3.4 percent, to $8.5 million, or 51 cents a share, from $8.2 million, or 49 cents.
Sales in the period rose to $131.2 million from $122.9 million.
Converse said the sales increases were partially offset by weaker sales in its basketball and children's footwear categories, and a softness in U.S. sales, which it noted is in line with the overall significant sales slump in domestic retail soft goods.
Order backlog at the end of the quarter fell to $157 million from $190 million a year ago. Inventory was off 10.4 percent to $89.1 million from $99.5 million.
--Fairchild News Service

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