NEW YORK — Fashion investment firm Keystone Holdings LLC has made its second purchase with the acquisition of Royce Hosiery Mills, the maker of legwear for Nine West, Dockers and other brands.
“The Royce transaction is consistent with our strategy of acquiring profitable branded companies with strong management teams,” Paul Palmeri, Keystone’s chief executive office, said Monday. “It fits the criteria of what we are looking for, and we don’t plan to change its operations.”
The purchase price was not disclosed. Keystone was formed in 2001 by Palmeri and Nicholas DeMarco, both longtime industry executives, and investment banker Matthew Bruderman. The New York-based firm also owns Hartstrings Inc., a children’s clothing and accessories company.
Palmeri said Royce’s management and employees will stay intact, including ceo Steven Lowenthal and president Robert Boglioli. The company has estimated sales of about $65 million.
Founded in 1949, Royce makes legwear and socks for Dockers, Nine West, Nine & Co., General Mills and divisions of Hershey’s candy, and also has a private label business. It has distribution and manufacturing facilities in West Virginia and a showroom and executive offices in New York, and employs about 250 people.
“This provides us with funding we would otherwise have to borrow and gives us greater opportunities,” Lowenthal said.
While the legwear industry has had some difficult years recently, Palmeri said Keystone views the category as a good long-term investment.
“Legwear is a stable product category,” he noted. “Like toothpaste, it’s a replenishment business.”
Palmeri noted that financing was provided by a $30 million credit facility from General Electric Capital, as well as subordinated and senior debt from Kaputhing, a division of The Icelandic Bank. He noted that Keystone continues to pursue other acquisitions in the fashion industry, especially ones that would be synergestic with Hartstrings or Royce.
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