PVH Corp. has completed the sale of substantially all the assets of its G.H. Bass & Co. division to G-III Apparel Group Ltd.
This story first appeared in the November 5, 2013 issue of WWD. Subscribe Today.
The transaction, first disclosed on Oct. 2, was for about $50 million in cash.
PVH opted to sell Bass following its acquisition of The Warnaco Group Inc. in February in order to focus on the Calvin Klein and Tommy Hilfiger brands, which have provided the bulk of its growth since their respective acquisitions in 2003 and 2010.
G-III is a licensee of both designer brands. Both firms are based in New York.
Kristin Burrows, president of Bass, will report to Bill Hutchison, president of Wilsons Leather. Prior to the acquisition, Wilson had about 150 stores, most of them in outlet malls.
Emanuel Chirico, chairman and chief executive officer of PVH, told WWD at the time the deal was struck that Bass “is a heritage brand that is well known, but we have not been investing in the brand from a marketing point of view. That has the ramification of putting sales and gross margin pressure on the business.”
Bass’ 160 outlet stores generated about $250 million in volume, accounting for about 40 percent of the retail sales of PVH’s heritage brands retail business. That heritage retail business suffered a 9 percent drop in same-store sales during the first six months of 2013, with softness at Bass the leading contributor to the decline.
Harbor Footwear Group Ltd. holds the license for Bass footwear and does more than $30 million in men’s, women’s and children’s footwear sales to its wholesale customers.
Morris Goldfarb, president and ceo of G-III, noted the acquisition afforded the firm an opportunity “to acquire a company that has two iconic components to it — Weejuns and Bucs are the heart and soul of American footwear. It was a brand that wasn’t given the appropriate attention at PVH.”
G-III said it expects the acquisition to subtract 10 cents a share from its earnings for the year but be accretive afterward.
PVH will use the proceeds from the sale to pay down debt. The company said it expected to incur a pretax loss of about $20 million in connection with the transaction. The divestiture will dilute fourth-quarter earnings by 5 cents a share on a non-GAAP basis and about 15 cents a share each year beginning in 2014.