Teen retailer Delia’s has inked a deal to sell its CCS brand to Foot Locker Inc. for $102 million in cash.
CCS is a direct-to-consumer retailer that sells skateboards and related apparel, footwear and accessories through catalogues and the Internet. Annual revenues are expected to exceed $80 million, said Foot Locker on Monday.
“The impending purchase of CCS is in line with one of our strategic priorities — pursuing the acquisition of athletic footwear and apparel retailers that are compatible with our existing portfolio of businesses,” stated Matthew Serra, chairman and chief executive officer of Foot Locker Inc.
The acquisition should afford Foot Locker synergies with its existing Footlocker.com/Eastbay operation.
The deal is expected to close within the next 60 days, and is subject to certain closing adjustments and review under the Hart-Scott-Rodino Antitrust Improvements Act.
“This was an opportunity for Delia’s to strengthen their balance sheet,” said Gilbert Harrison, chairman of Financo Inc., which advised the teen retailer. “In this crazy period of time, it is more important to allow them to focus on the growth of their core Delia’s and Alloy brands.
“The customer is one that Foot Locker has always targeted and totally fits in with Foot Locker’s and Matt Serra’s ideal of focusing on growing areas of the footwear marketplace,” he added.
In connection with the sale, Delia’s entered into separate agreements with Alloy Inc. to acquire from Alloy certain intellectual property assets used specifically in the CCS business that will be transferred to Foot Locker at closing. Alloy previously owned the Delia’s, Alloy, and CCS brands until the spin-off of Delia’s in December 2005.
Robert Bernard, ceo of Delia’s, said the company will “continue to prudently manage our business and carefully allocate our capital so that we may best position our company for long-term, sustainable growth.… In the coming months, we plan to fine-tune our long-term business strategy and expansion plans as we evaluate the level of our progress in our Delia’s brand initiatives, the strength of and outlook for overall consumer demand, and the real estate opportunities available to us in this market.”