NEW YORK — As far as apparel mergers and acquisitions are concerned, 2003 will go down as the busiest in a decade.
This story first appeared in the January 26, 2004 issue of WWD. Subscribe Today.
Last year, the total disclosed value of deals here and abroad rose 57.8 percent to $3.63 billion while the number of marriages skyrocketed 88.6 percent to 132 unions.
According to data reaching back over the past decade compiled by Factset Mergerstat, a leading provider of U.S. and international M&A information to the investment banking and corporate markets, 2003 was the busiest year for M&A activity on the apparel front. The runner-up was 1999 when the total disclosed dollar amount reached $6.74 billion, but the total number of deals was lower at just 117 (see chart). The dollar activities are based on deals in which the M&A price was publicly disclosed.
It’s important to note that while 2003 was better than 2002, it’s hard to tell whether it was superior to 1999 because, of the 132 deals done last year, only 54 reported dollar amounts. That leaves 78 deals as “confidential.”
In 1999, the privacy factor left 55 deals with undisclosed purchase prices. So, even though there was a higher number of deals last year that remained “private,” it’s still possible that the undisclosed deals in 1999 added up to a significantly higher dollar amount. The 62 disclosed deals in 1999 represented a dollar volume that is 85.5 percent higher than the 54 “fully disclosed” deals of 2003.
Still, 2003 was a remarkable year in regard to M&A activity. The deal of the year was VF Corp.’s purchase of Nautica Enterprises Inc. in July for $571.4 million. The top seller last year was Holding Di Partecipazioni Industrial, or HDP, which garnered a whopping $701 million for its coffers through the $351 million sale of Fila Sport SpA to a group led by Fila Korea Ltd., Fila USA Inc. and Cerberus Partners, and the $350 million sale of Fila Holding SpA to Cerberus Partners. Both HDP deals took place in March.
Other notable marriages include Oxford Industries Inc.’s April purchase of Viewpoint International Inc., owner of the Tommy Bahama brand, for $325 million; Nike Inc.’s July acquisition of Converse Inc. for $305 million, and Jones Apparel Group Inc.’s August rescue of Kasper A.S.L. from bankruptcy court proceedings for $221 million.
Kellwood Co. spent $140 million in February to buy Briggs New York Corp., while Liz Claiborne was busy acquiring Enyce Holding for $114 million in November and Juicy Couture Inc. for $39 million in March. Perry Ellis International scooped up Salant Corp. in February for $84.9 million.
Other deals involving lesser sums include LVMH Moët Hennessy Louis Vuitton’s buy of Antichi Pellettieri SpA from Mariella Burani Fashion Group SpA in September for $27.45 million, and Hong Kong firm Yue Yuen Industrial Holdings Ltd.’s acquisition of the sleepwear division of bankrupt Kleinerts Inc. in April for $3.8 million.
Among the private deals for undisclosed sums were Munich-based Bavaria Industriekapital AG Egana Goldpfeil’s buy of Louis Feraud in December, Donnkenny Inc.’s purchase of Robyn Meredith Inc. in September and Paris-based Maison Balmain SA’s addition of Thierry Mugler’s Haute Couture operations from fellow French firm Clarins in June. LVMH was also busy last year. The company purchased an additional stake in Fendi, in May, boosting its ownership to 84.1 percent. Meanwhile, Tarrant Apparel Group bought American Rag CIE.
Asian firms were also busy last year, with acquiring firms based in China, India, Singapore and Thailand. With few exceptions, the majority shared a common denominator: Most of the deals did not disclose amounts paid. The Asian firms also were more likely to be privately held and not subject to regulatory disclosure requirements.
Of special interest is French firm Pinault Printemps Redoute, or PPR, which is slowly gaining control of Gucci Group NV the old-fashioned way.
According to Mergerstat data, PPR spent a minimum of $322.8 million for an equity stake in Gucci in January and February. WWD’s data indicates that PPR, through subsequent purchases throughout the year in both the New York and Amsterdam Stock Exchanges, now holds about a 67.6 percent stake in Gucci. Plans were for PPR to increase its stake to 70 percent at the end of 2003, and under the terms of the deal struck between PPR and Gucci, the French company will gain control of Gucci’s supervisory board this year.
As reported, the two individuals who turned an almost bankrupt fashion house into a $2.54 billion luxury firm — president and chief executive Domenico De Sole and creative director Tom Ford — will be leaving Gucci when their contracts expire on April 30. One of the ongoing conflicts involved their reluctance to hand over control of Gucci to PPR, a changeover from a public firm to that of a wholly owned subsidiary.