Delta Galil Industries is continuing its shopping spree, taking a bigger slice of the intimate market.
After picking up a European underwear brand last year, the Tel Aviv-based apparel company has now turned its attention to Asia, inking a deal to buy one of the region’s intimate players, Bogart Group, for an undisclosed sum.
Headquartered in Hong Kong, Bogart is a strategic partner for brands such as Victoria’s Secret, PVH, Jockey, Adore Me, Vanity Fair and Hanes and clocked in at $230 million in consolidated sales in 2018.
As part of the deal, which is expected to close in the third quarter, Delta Galil will also acquire Bogart’s subsidiaries, lace manufacturer Brunet and padding producer B&B.
“We’re very pleased to be adding The Bogart Group to our strong portfolio of intimate apparel, as expanding our footprint in the bra category has been a long-term goal for Delta Galil,” said Isaac Dabah, chief executive officer of Delta Galil.
Dabah called the deal a “strategic opportunity” and said, “I see great potential for Delta to leverage Bogart’s strong market position to further build its company, while also helping Delta’s business units expand to the next phase of growth.”
The move comes just over a year after Delta Galil bought France’s The Eminence Group, which included Eminence, a premium underwear brand for men, along with Athena and Liabel, mass-market underwear brands for men, women and kids. Intimate and sleepwear makes up around 85 percent of Delta Galil’s business.
Delta Galil’s other intimate brands include Schiesser, Delta Israel, Fix and Nearly Nude. Bogart is its first acquisition in Asia.
As for whether it will be adding any other intimate brands to its offering anytime soon, Dabah told WWD it will be unlikely during the next year.
“I think at this moment we’re going to digest what we have and probably for the next year or so be focusing on Bogart,” he said. “We could do some small tuck-ins, but I would say major acquisitions we’re probably not going to focus on in the next year.”
The acquisition news comes not long after the company released its first-quarter results, which were a largely mixed bag.
While sales grew 9 percent to $365.4 million from $334.5 million a year earlier, net income was $3 million, down from $7.4 million.
At the time, Dabah attributed this to the devaluation of the euro versus the U.S. dollar, as well as a shift of holiday sales to the second quarter and new store opening expenses. He said the company was on track to meet its full-year target, increasing sales by 3 percent and 6 percent to a range of $1.55 million and $1.59 million.
The firm expects the Bogart deal to show a profit in the second half and to be accretive to earnings in 2020
As well as a plethora of intimate brands, Delta Galil also owns Seven For All Mankind and Splendid/Ella Moss.