VF ACQUIRES CHIC BRAND FROM CHIC BY HIS
Byline: Scott Malone
NEW YORK — VF Corp. on Thursday said it acquired the Chic brand name from Chic by HIS Inc. and had entered into an agreement to acquire the HIS name.
This confirms reports in these columns last month.
The Greensboro, N.C.-based apparel giant will move the Chic brand into its mass jeanswear unit.
In a telephone interview, Angelo La Grega, president of that unit, explained that VF believed the Chic brand appealed to customers currently not served by its Wrangler and Riders brands.
“The Chic consumer franchise is very strong — there’s a lot of loyalty,” he said. “Many of their issues over the last two to three years have been more operational.” He said that Chic jeans appeal to two distinct consumer groups. One is women age 28 to 48 who dress “to look good to men” and appreciate the proportional fit of the brand’s core five-pocket jeans. The other is women 50 to 65 who like the brand’s comfort offerings, like jeans with full elastic waistbands.
They are two very distinct consumer groups, something La Grega said is unusual for any brand. “But they both have very strong footholds and consumer franchises for their own customers,” he said.
La Grega declined to break out volume for the Chic brand but acknowledged that it has been “declining aggressively” in recent years.
The firms did not disclose the terms of VF’s acquisition of the Chic brand and the rights to the HIS brand outside Europe.
VF also agreed to acquire Chic by HIS’s majority stake in HIS Sportswear AG, which produces that brand in Europe. The firm offered to pay 9.25 euros per share, as long as it can acquire at least a 75 percent stake in that business. If all HIS Sportswear shares are tendered, the total price would come to around $40 million, VF said in a statement.
The current European volume of HIS is around $90 million.
For its part, New York-based Chic by HIS plans to focus on its private-label manufacturing operations. “These transactions will provide the company with much-needed capital and allow us to move forward as a quality manufacturer for private label customers utilizing our state-of-the-art facilities in Mexico,” said Chic by H.I.S. co-chairman and chief executive officer Daniel Rubin, in a statement.
According to Chic by HIS’s most recent 10-K, the company has three manufacturing facilities in Mexico and a laundry. Its Mexican payroll is 2,800.
Chic by HIS has stumbled in recent years. In 1999, the company reported a $13 million net loss. That came on a 6.7 percent decrease in sales, to $238 million. The company noted that an increase in private label sales was offset by declines in its branded business.