Max Azria Finance Ends UP with 29.81% Stake in Algo
LOS ANGELES -- Max Azria and Canada's Algo Group have finalized details of their strategic alliance in a multifaceted transaction giving Max Azria Finance Inc., a Canadian affiliate of Los Angeles-based BCBG Max Azria, a 29.81 percent stake in...
LOS ANGELES -- Max Azria and Canada's Algo Group have finalized details of their strategic alliance in a multifaceted transaction giving Max Azria Finance Inc., a Canadian affiliate of Los Angeles-based BCBG Max Azria, a 29.81 percent stake in Montreal-based Algo.
Azria, president of AZ3, the maker of BCBG Max Azria and other labels, paid about $4 million for the stake, including $3.3 million for 21 million class A voting shares of Algo at a price of about 16 cents a share and, in a separate but related transaction, approximately $650,000 for 9.4 million class A voting shares at approximately 7 cents each. The latter purchase was made from 3739091 Canada, a company controlled by Algo chairman Dan Elituv.
Elituv's firm exercised a warrant and acquired 8.3 million shares of Algo at about 9 cents a share, an aggregate price of about $769,000. All figures are converted from the Canadian dollar at current exchange.
The series of transactions left Elituv's company with 34.65 percent of Algo's common voting shares on a fully diluted basis.
As expected since Algo and BCBG announced their alliance in October, Azria has joined Algo's board of directors.
Algo, which has worked to recover from two years of steep losses, becomes the Canadian licensee for all apparel, accessories and footwear under the BCBG Max Azria brand, as well as the Parallel contemporary and To The Max junior labels owned by AZ3.
The deal also involves BCBG in Algo's business south of the Canadian border and into Mexico.
As reported, the BCBG label will continue to be made under the auspices of Azria's company while Algo will be actively involved in making, as well as selling and distributing, the Parallel and To The Max labels for the Canadian market and elsewhere.
The licensing agreement does not include Azria's couture/deluxe designer ready-to-wear label, Herve Leger, acquired by AZ3 in 1998.
"There are different aspects of the deal," said Raoul Heredia, Algo's president and chief executive. "It is in its infancy and it is about globalization."
In addition to the exclusive distribution agreement for the three apparel labels, the transaction gives Algo the rights to footwear. Azria currently produces footwear on a private label basis in Canada.Heredia said that Algo will initially take over the private label distribution of To The Max, BCBG Max Azria and Max Azria shoes in Canada and eventually develop two footwear lines under the Algo label for distribution in North America.
Lastly, Algo plans to capitalize on its strong Canadian dress business and become a supplier to the North American market.
"We will try to develop distribution with Max's contacts but on a different level, which is more moderately priced," Heredia said. "Brand recognition is all important in today's highly competitive retail environment. Our experience with branded products has been successful and we are genuinely excited with the prospects provided by the BCBG Max Azria group."
Calling it his "new baby," Azria said the move is "the best way for BCBG to grow its brand in Canada."
He noted that he retained the rights to his firm's retail business in Canada while Algo acquired wholesale distribution.
BCBG currently operates seven stores in Canada and plans four more next year.
Azria has said that the agreement could elevate Algo's U.S. sales to 75 percent of its total and also boost his company's business in Canada to 10 percent of revenues from its current level of 3 percent.
In Algo's statement, Elituv called Azria "a true partner. He has delivered to us all that he promised and has made a substantial investment in the company."
Algo has seen its sales slump and earnings evaporate in recent years. Last year, the company had a net loss of $7.1 million on sales of $114.1 million, as weakness in the Canadian retail market forced it to undertake significant restructuring and the elimination of unprofitable businesses.
AZ3 is expected to hit $350 million in worldwide volume this year and could hit $450 million next year, Azria said.
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews
“Stranger Things” is getting a new cast member for season 2. Meet @sadiesink_, the 15-year-old who will be joining the Netflix series for its new season. You may recognize her from “The Glass Castle” with Brie Larson and Woody Harrelson, but the Texas native’s next role goes in an entirely different direction. She describes her character, Max, as “a rough and tumble skater girl [who] becomes friends with the boys at school.” The second season debuts on October 27. (📷: @jgreenery) #wwdeye
Amid the Harvey Weinstein controversy, there’s another sector that’s being put under the spotlight for sexual abuse: the modeling industry. While rumors about abuse and sexual harassment of female and male models — and the photographers, agents and others who perpetrated it — have circulated within the fashion world for years, model @cameronrussell started posting stories from models on Instagram last week about abusive situations they’ve encountered — from sexual harassment and molestation to attempted rape. Over 75 have weighed in so far. Read more on WWD.com. Link in bio. #wwdnews
To celebrate its 16th anniversary, @dylanscandybar tapped designers and celebrities to create mosaics out of candy. The mosaics will be auctioned off to support the philanthropic cause of each participant’s choice. Pictured here is the mural created by @aliceandolivia's Stacey Bendet. For a first look at some of the other artwork being unveiled tonight, go to WWD.com. #wwdeye
The annual Veuve Clicquot Polo Classic in Pacific Palisades this weekend drew Kate Hudson, Tracee Ellis Ross, Laura Dern and more. See pictures of the star-studded event on WWD.com. (📷: @chelsealaurenla) #wwdeye
In his new book “Hollywood Royale,” Andy Warhol’s Protégé Matthew Rolston celebrates the Eighties revival of Hollywood glamour. Featuring more than 100 portraits taken by Rolston from 1977 to 1993, the book contains photos of icons like Michael Jackson, Cyndi Lauper, and @drewbarrymore, pictured here in 1991. “Hollywood Royale,” out today, will be accompanied by an exhibition opening at Los Angeles’ Fahey/Klein Gallery on March 1. #wwdeye
"Nowadays when life is not so happy with everything going on in the world, I think people come to me for a little bit of whimsy and color and fun." - Designer Rebecca De Ravenel on her cult-favorite jewelry line. (📸 : @vsteves) #wwd40
“Everyone is talking about how the retail industry is struggling, but I think it’s an incredible time because brands who are doing something different and innovative are setting themselves up for the future,” said @adamgoldston, who founded the luxury athletic brand @apl with his brother @ryangoldsten. The Goldston’s are part of WWD’s 40 under 40: a group of industry notables. See the rest of the list on WWD.com. (📷: @vsteves) #wwd40
@eyeswoon blogger Athena Calderone debuted her first-ever cookbook, “Cook Beautiful,” which is heavily centered on the presentation and visual expression of food. Pictured here are her miso glazed carrots from the book. Get the recipe on WWD.com. (📷: @johnny_miller_) #wwdeye