MARCIANO SIGNS DEAL TO BUY YES
LOS ANGELES — Georges Marciano has signed a definitive agreement to acquire an 80 percent stake in Yes Clothing Co.
Plans for the deal were disclosed last month. In line with previously announced terms, Marciano will acquire shares held by George Randall, Yes’s chairman, and Moshe Tsabag, its president. Each executive holds 1.5 million shares. Marciano, who until August 1993 was chairman and designer of Guess Inc., will pay $6 million in cash and notes for the stock.
Shares of Yes closed unchanged at 4 Thursday in over-the-counter trading.
Randall will leave the firm to pursue other interests in the apparel industry while Tsabag is still discussing the possibility of staying with Yes. Both will continue to operate the company until the deal closes.
The deal is conditional upon expiration of the Hart-Scott-Rodino antitrust waiting period and the absence of material adverse changes in the firm’s business prior to closing. Due diligence has been completed.
Yes said it expects to report a “material loss” in the third quarter ended Dec. 31. In the year-ago quarter, Yes lost $2.1 million on sales of $5.3 million. In the six months ended Sept. 30, Yes lost $1.1 million on sales of $16.3 million.
Marciano, who will become Yes’s chairman upon closing, has reached an agreement with Yes for it to start immediate production of his two new labels, Misfits and GMSurf, on a “cost-plus” basis. Existing orders for the lines now exceed $2 million.
After closing, Marciano plans to negotiate a long-term license with Yes for Misfits, a better denim collection, and GMSurf, a junior and young men’s surf-inspired sportswear line. Marciano also intends to provide Yes with nonexclusive design and consulting services tied to future profitability.
Regarding Yes’s existing businesses, Marciano said he plans to focus and expand the junior sportswear and knit lines as well as its Sedan young men’s lines. Yes will open its summer line next week in New York during market week.
In addition, as part of the transaction and at Marciano’s request, Yes has negotiated the termination of its children’s wear license in the U.S. and Western Hemisphere, as well as its Canadian licenses for all products.
Marciano said he plans to reenter the Canadian market and produce Yes children’s wear in-house. He said he hopes to start shipping a Yes Kids line for the back-to-school season.
Marciano said that one of the important reasons he acquired Yes was that it was based in Los Angeles. “If it had been in South Carolina, I wouldn’t have bought it,” he said. He also denied speculation that the sound-alike similarity of the company name to Guess — to which his name was long linked as designer — was a factor in the deal.
In a split over corporate direction at Guess, Marciano resigned as its chief executive officer in August 1993, selling his 40 percent stake for $220 million to his brothers — Maurice, Paul and Armand — who continue to own and operate Guess.
— Fairchild News Service