The Men’s Wearhouse Inc. has reunited Joseph Abboud the man with Joseph Abboud the brand.

This story first appeared in the July 19, 2013 issue of WWD. Subscribe Today.

On Thursday, the Fremont, Calif.-based retailer said it signed a definitive agreement to acquire JA Holding Inc., a subsidiary of J.W. Childs Associates, for $97.5 million in cash. The deal is subject to certain adjustments and is expected to close in the third quarter. The company expects to finance this acquisition as well as a $200 million share repurchase program with cash on hand and/or proceeds from its existing credit facility.

J.W. Childs bought the Joseph Abboud name and trademark for $65.5 million in 2000. Since that time, confusion in the marketplace and emotionally charged lawsuits about the use of the Joseph Abboud name have marked the relationship between the designer and the label that he created in 1987.

Also in the last three years, there have been persistent rumblings that J.W. Childs was looking for a buyer for the brand. The label was reportedly taken off the market during the recession, but interest began heating up this year with Iconix Brand Group, Grano Retail Investments and others interested in the label. Iconix was believed to be in the running until the very end.

Doug Ewert, president and chief executive officer of Men’s Wearhouse, said he believes the Joseph Abboud brand can “easily be a $300 million or more business for us within two years.” The plan is to use the label on all product categories in the store — everything from suits and tuxedos to sportswear and furnishings — and add more volume through licensing and international expansion.

Joseph Abboud has been chief creative director of Men’s Wearhouse since the end of last year.

The deal includes JA Holding’s U.S. factory in New Bedford, Mass., which employs 450 people. Ewert said he considered the factory one of the prime assets of the acquisition and will allow the company to produce and market clothing that is made in America. It also allows Men’s Wearhouse to jump into the lucrative made-to-measure business.

“We love that possibility,” Ewert said, noting that the factory can turn a made-to-measure suit within 10 days.

“It’s probably the best of all the American factories,” Abboud said of the facility. He said when it opened in the late Eighties, Torino, Italy-based GFT International, his then joint-venture partner in the creation of JA Apparel, used its expertise in Italian tailoring to build the factory.

“They brought Milan to New Bedford,” Abboud said. “They really make extraordinary product.

“It’s really full-circle to come back to the factory that launched my first collection,” he added. “I can’t wait to get back inside it.”

The deal with Men’s Wearhouse also means that the Joseph Abboud label will no longer be wholesaled. Calling it a “vertical” brand, Ewert said Men’s Wearhouse will honor the orders in place for the collection before pulling it from other stores. The brand is sold at Nordstrom, J.C. Penney and other department and specialty stores.

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“We’re taking a business that is all wholesale and licensed product and converting it to a retail model,” he said. “That will take some time. We’ll work through the agreements that are currently in place and continue to ship orders. But it will then be our exclusive brand.”

He said the Joseph Abboud label will have among the highest-priced product offered at the Men’s Wearhouse stores. Price points have not yet been established, but the company sells Vera Wang tuxedos for $799.99, according to its Web site, and Lauren by Ralph Lauren suits for $649.99.

“The average out-the-door price of a suit at Men’s Wearhouse is $250,” Ewert said. “But we also sell suits for over $400 and we see this as an opportunity to trade up to higher-priced merchandise.”

Ewert said he expects it to be priced similarly to Hart Schaffner Marx and Jack Victor product. A Jack Victor suit was on the Web site Thursday with a sale price of $699.99. “We’re going to be able to offer a Made in the USA suit for less than anybody else,” he said.

Ewert said the deal “accelerates our strategy of offering exclusive brands with broad appeal at attractive prices. Current and future customers will benefit from authentic American designer clothing, manufactured in the USA, at unparalleled value.”

Anthony Sapienza, president and chief executive officer of JA Holding, said, “We are proud of the progress that we have made during our nine-year partnership with J.W. Childs in building Joseph Abboud into a modern, sophisticated men’s wear and lifestyle brand. We look forward to continued growth in the brand at Men’s Wearhouse.”

Ewert declined to discuss what will happen to the team that has been running the business led by Sapienza and including designer Bernardo Rojo, saying those decisions are premature. Industry sources expect Sapienza, whose background is in manufacturing, to remain with the brand and oversee the factory, but there doesn’t appear to be a role for Rojo or the rest of the team.

Ewert said that he has been a “fan of Joseph’s work” since he was a buyer at Macy’s West in the late Eighties. “I’ve always loved the product. I think he has a great taste level and it’s a real ‘men’s-y’ line. So it made a lot of sense to carry the Joseph Abboud product at Men’s Wearhouse and marry it with its designer. We’re excited about the opportunities to put the Abboud brand on product Joseph designs.

“And we can advertise it. We haven’t been able to advertise designer names before.”

Ewert said the deal was not a factor in the blowup last month that saw Men’s Wearhouse fire its founder and executive chairman George Zimmer. At the time, industry sources speculated that Zimmer may have been threatened by Abboud taking on a larger role at the company. But Ewert dismissed that notion, saying that the situation was not related.

In addition to the Men’s Wearhouse stores, the Joseph Abboud product will also be sold at the company’s Moores division in Canada. All told, Men’s Wearhouse has 1,141 stores.

Ewert said the transaction will become accretive to earnings in fiscal 2014.

Adam Suttin, a partner at J.W. Childs, said the deal was signed Wednesday night and is expected to close in three weeks.

“This was a good investment for us. We took some difficulties during the [economic] downturn, but we weren’t alone in that. Fortunately, we evolved the business so that there was significant licensing involvement to support the business during the downturn.”

Andrew Jassin, of Jassin Consulting Group, had worked with JA Apparel over the years and completed at least 10 licensing deals with the brand. Of the latest development, he said, “This is a good deal for J.W. Childs as they get a premium over the purchase price.” He also said reuniting the brand with the designer is a good move and “taking the brand directly to retail makes sense.”

In a research note Thursday, Stifel Nicolaus analyst Richard Jaffe commented, “We see this as a unique opportunity to reunite the man with his brand. We believe this will be a fairly seamless transaction and will positively impact the company long term….Similar to how Vera Wang has been a positive for the tuxedo rental business, by offering fashion-right product at a higher price, we believe Joseph Abboud for suits will have a similar impact, driving higher [average unit retail prices] and margins.”

He said the company’s focus on better brands “has attracted new customers and has improved MW as a destination for the male shopper.”

Shares of Men’s Wearhouse Thursday rose 20 cents, or 0.5 percent, to close at $39.15.