FILING: VF CORP. PAID $9.8M FOR CHIC BRAND
NEW YORK — VF Corp. paid $9.8 million to acquire the Chic name and the rights to the H.I.S. name outside Europe from Chic by H.I.S., according to a filing with the Securities and Exchange Commission by Chic by H.I.S.
The filing notes that Chic by H.I.S., which has changed its name to Durango Apparel, has also entered into a contract to provide one million units to VF by Dec. 31, 2000, plus an additional 2 million units to VF upon the successful completion of the sale of its majority stake in H.I.S. Sportswear AG. At the time it acquired Chic’s U.S. trademarks, VF also entered into an agreement to acquire Chic’s majority stake in H.I.S. Sportswear AG, Chic’s European business, which sells mainly to Germany.
As reported, Durango Apparel plans to focus on its private-label manufacturing operations with its facilities in Mexico for Levi’s, J.C. Penney Co. and others. VF also agreed, the filing indicated, to purchase approximately 300,000 units of branded products valued at $2.4 million.
The filing also notes that Chic’s loss widened to $13.3 million in the first quarter ended Feb. 5 from $1.9 million a year ago due to sales declines, plants operating at less than full capacity and the sale of inventory below cost.
Sales fell 12.2 percent to $45 million from $51.2 million. U.S. sales declined 2.3 percent to $25.6 million, while European sales slumped 22.6 percent to $19.4 million.
Chic was just one of a spate of acquisitions made by VF Corp so far this year. Others include the Eastpak backpack and daypack business, The North Face outerwear firm and Gitano jeans. VF paid a total of $320 million for these businesses, which are expected to yield annual sales of more than $600 million.