YMLA TO GO PUBLIC IN PACIFIC COAST DEAL
Byline: Vicki M. Young
NEW YORK — In a move that will make a private company public, YMLA Clothing of Los Angeles is merging with Pacific Coast Apparel Co. Inc.
Pacific Coast is a publicly traded San Francisco-based company that once owned the U.S. licensing rights to the Aca-Joe and Cotton Stuff brands. YMLA is a privately held Los Angeles-based company that manufactures for the young men’s market. Together, they will grow the YMLA business that could include expansion into the junior market, according to Terry McGovern, chief executive officer of Pacific Coast.
“By virtue of the merger, YMLA will become a public company,” McGovern said. He declined to provide details of the merger, but said that the information will be disclosed once the actual paperwork is completed. McGovern expects the union of the two firms to be completed by the end of April. Meanwhile, the letter of intent to merge is a binding agreement between the two companies, McGovern said.
Once the merger is done, Larry Block will continue to be ceo of the new YMLA, while McGovern, whose title has not been determined, will focus on investor relations, long-term financing and all Securities and Exchange Commission reporting requirements.
The goal of the company will be growing the YMLA business. “The intent is to grow the business internally through YMLA’s brands,” said McGovern. “Together we would acquire other apparel companies, most likely those on the West Coast. We’ve actually looked at some opportunities, private companies in the neighborhood of $40 million to $50 million in annual revenue. We’re also considering the junior market, but right now we’re concentrating on getting the merger completed.”
If the merged company does elect to enter the hot junior market, Pacific Coast’s history with its former Cotton Stuff brand will provide some expertise in women’s apparel. According to McGovern, Cotton Stuff — which targeted the men’s and women’s better sportswear category — was a brand owned by the company until it was sold in September 1999. Pacific Coast, which sold its U.S. license rights to Aca-Joe in 1998, used to do about $28 million annually, but hasn’t been in operation since the Cotton Stuff sale.
Block said in a statement, “We are excited about the opportunities to grow the YMLA concept. Our strength has been in our ability to deliver a quality oriented, fashion-driven product with a very short lead time, which has provided our customers with superior gross margins and fresh styles.”