TOKYO — Renown Inc., a leading manufacturer and retailer of women’s wear, and D’Urban Inc., a major supplier and retailer in the men’s wear market, are establishing a joint holding company in March to integrate management control of the two companies.

Following the formation of the holding firm, Renown D’Urban Holdings Inc., the two firms will become its wholly owned subsidiaries, the companies said, noting that a reorganization and restructuring of the group will be started with completion targeted by February 2005.

Since Renown and D’Urban are in different areas of business, the consolidation will create synergies. Renown does have a men’s line, Renown Homme, but it should reinforce D’Urban’s lineup, while the two companies will be able to enhance their marketing power by sharing their business bases and operational know-how, the companies said.

Renown and D’Urban said they are turning increasing attention to the emerging youth market in Japan, and both companies will be able to offer broader lineups of merchandise and expand their presence through the combination of their resources. D’Urban, for instance, will be able to share Renown’s expertise on store operation, they said.

Renown and D’Urban already are closely affiliated with each other, with Renown owning a 24.94 percent stake in D’Urban and D’Urban owning 0.54 percent of Renown’s outstanding shares. The two companies will now be completely integrated under the holding company.

The merged company is expected to generate pretax profits of $72.78 million, or 8 billion yen, translated at current exchange, in 2006 on sales of $1.45 billion, or 160 billion yen, which are projected eventually to rise, respectively, to $90.9 million, or 10 billion yen, and to $1.64 billion, or 180 billion yen, the companies said.

Renown posted an operating profit in the last business year ended Jan. 31 for the first time in 12 years after a losing streak. It chalked up operating income of $25 million, or 2.75 billion yen, compared with a loss of $14.3 million, or 1.57 billion yen. Sales totaled $975.4 million, or 107.29 billion yen, down 8.7 percent from the previous year.

D’Urban, which has seen a continuous decline in its sales and income for the past few years, also is in need of reshaping its business strategy. Its sales sagged to $314.8 million, or 34.62 billion yen, in the last business year ended December 2002, a drop of 7.3 percent from two years ago, while the company incurred a loss of $3.9 million, or 432 million yen, on the operating basis compared with a black ink figure of $12.5 million, or 1.38 billion yen, two years earlier.

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