Delta Galil Industries Ltd. said Thursday it’s extending talks with The Jones Group Inc. about acquiring Jones’ jeanswear division beyond the original one-month deadline and expects to close the sale in the next seven weeks.
Jones and Delta Galil said on Oct. 11 they were in talks about a sale of the jeanswear unit for between $350 million and $400 million, and Jones said it expected discussions would be “concluded or terminated within a month.” That would have made the deadline for striking a deal today.
On Thursday, Isaac Dabah, chief executive officer of the Israeli firm best known for seamless intimate apparel and knit sportswear, said “negotiations with The Jones Group and the banks are continuing. We currently expect that the transaction will be finalized by the end of this year.”
Financial and market sources told WWD that the discussions about a deal had come down principally to a tug-of-war over price. Dabah declined further comment and Jones stuck to its policy of not commenting on the negotiations until they are concluded.
Jones on Oct. 26 reported third-quarter earnings, which included weaker results for its domestic wholesale jeanswear unit. In its discussion of the division’s 4.5 percent drop in sales for the first nine months of the year, to $611.7 million, it pointed out that shipments of the Gloria Vanderbilt, Energie and L.E.I. jeanswear brands were down, but principally due to a shift in the timing of shipments, and that the introduction of Jessica Simpson product lines had helped to offset the declines.
Dabah is a familiar face at Jones, and the acquisition of its jeanswear assets, if and when consummated, would reunite him with the Gloria Vanderbilt brand and its denim franchise, which he sold to Jones for $138 million in cash, stock and assumption of debt in 2002. Dabah, who’d been ceo of Gloria Vanderbilt Apparel Corp., stayed on in that capacity at Jones and became group ceo for Vanderbilt, L.E.I. and Polo Jeans Co. the following year. He left Jones in 2004, having built its denim business to more than $1.2 billion, and, through his investment vehicle GMM Capital LLC, became Delta Galil’s largest shareholder in 2007 and its ceo in 2008.