It’s safe to assume the new year will mean more acquisitions for power-hungry Liz Claiborne Inc., Jones Apparel Group and Kellwood Co.
The mega-apparel corporate trio has maintained that buying other companies and looking for ways to extend brands is the best way to stay competitive in the challenging economy and constricted retail environment.
"In every case, we’re looking to maximize product opportunities," said Peter Boneparth, chief executive officer and president of Jones. "But as a $4.3 billion company, it’s not realistic to grow 10 percent without doing some acquisitions. We will continue to look for acquisitions, and the acquisitions of LEI and Gloria Vanderbilt have been good. In this kind of environment, there are opportunities for people who are large and well-diversified and they actually have become more evident. The reality is there are very few buyers out there — there are only two or three of us."
In July, Jones purchased LEI, one of three independent brands that reinvented the moderate junior jeans business in the Nineties, for $385 million. The acquisition boosted Jones’ powerhouse jeans stable of Polo Jeans Co., Todd Oldham Jeans and Gloria Vanderbilt. That followed the March purchase of Gloria Vanderbilt Apparel Corp. for $138 million, a deal that helped boost its share of the moderate jeans market. At the time, Boneparth said, "Our moderate strategy is focused on branded companies where we can leverage core competencies, management is willing to stay and where it’s basically additive to earnings."
Paul Charron, chairman and ceo of Liz Claiborne, said the company, like Jones, is always on the lookout for possible acquisitions. This year, Claiborne added to its portfolio with the purchase of the bridge brand Ellen Tracy for about $180 million in October. The move gave the apparel giant control of two of the largest core bridge players in department stores, including its own Dana Buchman division.
"You should always assume that we’re always in dialogue with someone about something," Charron said recently. "Our focus is fashion at multiple price points and we think the concept of diversity resonates at multiple price points. I’m looking for acquisition opportunities that are varied, that could be in men’s, accessories and could have specialty retail legs."For example, in 2001 Claiborne bought European apparel and accessories company Mexx Group BV for about $264 million. At the time, the acquisition was the latest merger for the company, which, since 1999, has acquired controlling interest in Monet, Sigrid Olsen, Laundry by Shelli Segal and Lucky Brand Dungarees.
"It’s a great property," Charron said at the time. "We recognize that the Mexx acquisition creates opportunities for us to take our current portfolio global via Mexx and to take the Mexx portfolio to the United States via Liz, but it’s premature to speculate when this would happen."
Kellwood, too, is in hot pursuit of smart acquisitions and has been on this trail since making its first acquisition into women’s branded apparel in 1985 with Cape Cod-Cricket Lane Inc. In November, the company embarked on its latest venture: a licensing deal with men’s wear giant Phillips-Van Heusen to produce an Izod women’s lifestyle collection that could help make Izod a billion-dollar brand. The company also expanded into children’s wear this year by buying Gerber and into designer intimates with an Oscar de la Renta licensing agreement.
Hal Upbin, chairman, chief executive officer and president, said Kellwood could be a $3 billion company one day, as its sales exceed $2.3 billion today.
Kellwood’s portfolio today spans about 20 brands, as well as more than 300 trademarks ripe for possible brand extensions and labels. Its main apparel brands include Sag Harbor, Koret, David Meister, Democracy, David Dart, Sangria and Jax, and licenses with Emme, Bill Burns, Wilson socks, Stan Herman robes, Nautica men’s dress shirts, men’s sweaters and outerwear under Slates, Gerber children’s wear and Izod women’s sportswear.
"We are who we are," said Upbin recently. "Our great core strengths are in sourcing, pricing and distribution."
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