ARIS ACQUISITION OF LOLA COST AROUND $20 MILLION
NEW YORK — Aris Industries Inc. paid about $20 million, including stock, in acquiring Lola Inc., the maker of the XOXO juniors line, according to a filing with the Securities & Exchange Commission.
The merger was completed Aug. 10, but the purchase price had not been disclosed.
Aris paid $10 million in cash and distributed 6.5 million shares of Aris’s stock, valued at the time of the transaction at $1.50 each, according to the filing. Aris now has about 36.5 million shares outstanding.
Shares of Aris closed at 3 1/2, down 7/32, Wednesday in over-the-counter trading,
As reported, Lola, based in Los Angeles, with a wholesale volume expected to reach $110 million this year, will continue to operate as an independent unit under Gregg Fiene, its chief executive officer, who will also head up Aris’s women’s brands and become vice chairman of Aris.
Fiene reports to Arnold Simon, Aris’s chief executive. In early March, a group led by Simon, former president and ceo of Designer Holdings, acquired control of Aris for about $20 million. Since Simon’s arrival, Aris has also reached an agreement to license the Stetson name of casual apparel and to establish freestanding stores, and acquired the worldwide rights to Baby Phat sportswear.
In connection with the XOXO transaction, Aris in August increased its revolving credit line to $80 million from $65 million, and obtained a $10 million term loan, the filing said.
The 10-Q filing also shows that Aris lost $3.1 million in the second quarter ended June 30 after restructuring charges of $1.9 million to consolidate operations and facilities, including severance and writedowns of leases and fixed assets.
Excluding these charges, Aris, primarily a men’s outerwear and sportswear maker, reduced its loss to $1.2 million from $2.8 million.
Sales rose 21.9 percent to $25.3 million from $19.8 million, reflecting the growth in its Fubu boys’ wear and men’s loungewear line to $16.6 million from $2.8 million. Fubu’s gains offset decreases in other areas.
In the half, the loss of $10.4 million stemmed largely from an $8 million charge to write off goodwill, severance to its former president Charles Ramat and the consolidation charges.
In the prior year, Aris lost $4.1 million. Sales climbed 43.1 percent to $53.5 million from $37.3 million.