FOSSIL WANTS TO BUY 75% OF FOSTIM
NEW YORK — Fossil Inc. has signed a letter of intent to purchase from Seiko Corp. a majority interest in the distributor of Fossil products in Japan.
The Japanese distributor, Fostim, is currently a wholly owned subsidiary of Seiko. The price would be about $700,000 for more than 75 percent of the company, Fossil said, and the deal is expected to be completed in April.
However, Fossil, based in Richardson, Tex., noted that the terms of the acquisition are still subject to the negotiation of a definitive agreement and said there can be no assurances that the purchase will be completed.
Fossil said that in April 1994, it signed a five-year agreement giving Fostim the right to act as Fossil’s distributor in Japan. Since then, Fostim has placed Fossil products in more than 180 retail locations in Japan.
“While Fostim has struggled financially in a sluggish economy, we are very pleased with the exposure Fossil and FSL watch products have obtained in a relative short time and consider Japan a key site in developing a world brand,” Randy Kercho, Fossil’s chief financial officer, said in a statement.
Separately, from Tokyo, Seiko said it expects a loss of $191.6 million (20.1 billion yen) in the year ending March 31, after extraordinary charges of $201.2 million (21.11 billion yen) principally from problems at Seiko operations in the United States and in France. A year earlier, Seiko had a loss of 888 million yen.
Seiko said in the current year it will take a special charge of $129.7 million (13.61 billion yen) for the write-down of its investment in Seiko Corp. of America, based in New Jersey. It will also take a charge of $71.4 million (7.5 billion yen) to cover the cost of the dissolution of its unit in France. Seiko will set up a new wholly owned unit, Seiko France SA, to replace Compagnie Generale Horlogere SA. — Fairchild News Service