LONDON — Courtaulds Textiles has acquired women’s hosiery and sock operations in France and the U.K. from the financially troubled Hartstone Group PLC for about $67.5 million (45 million pounds at current exchange rates) in cash.
The deal covers the Cogetex and Sotexa groups in France. Their main brand is Well, which is the second-largest brand of women’s hosiery in France, with 28 percent of the market, Courtaulds Textiles said. Dim is France’s biggest hosiery brand. Sotexa, a sock producer, has 5 percent of the French sock market.
The two French brands had trading profits of $5.55 million (3.7 million pounds) on sales of $139.5 million (93 million pounds) in the year ended March 31. They are sold mainly through supermarkets and hypermarkets in France.
The purchase also includes the Hartstone hosiery operation based in Sutton-in-Ashfield, England, which produces women’s hosiery under the Bear label. The U.K. business had trading losses of $1.5 million (1 million pounds) on sales of $21.9 million (14.6 million pounds) last year. Combined assets of the French and U.K. businesses were $48.6 million (32.4 million pounds) at the end of last March.
Noel Jervis, chief executive of Courtaulds Textiles, said the purchases fit in with the group’s strategy to develop internationally in businesses where it has existing product and management strengths. There is considerable potential to further develop the Well brand in Continental Europe and the U.K. operation will be managed alongside the group’s existing U.K. hosiery brand Aristoc, he said. Aristoc is the number-two U.K. brand behind Pretty Polly, owned by Sara Lee Corp.
The sale is part of Hartstone’s plans to restructure its operations after it fell into the red, breached its borrowing arrangements and failed to meet the final $12.8 million payment on the purchase of Etienne Aigner and Michael Stevens in the U.S.
It appointed a new chairman and chief executive, Shaun Dowling, in May 1993; agreed to a standstill arrangement with its lenders, which expires Feb. 15, and developed a new business plan. Dowling said the group does not have the financial resources to develop both its hosiery and leather goods businesses. Since the leather goods operations are more profitable, it has been decided to focus Hartstone on them.
It plans to further strengthen Aigner and Stevens in the U.S. by expanding their distribution in North and South America and into other product categories. It also aims to return its United Kingdomleather goods business to profitability; Hartstone now claims 19 percent of the U.K. handbag market and 11 percent of the small leather goods market.
Hartstone said it continues to review the medium-term prospects of its other hosiery businesses, which include Aznar in Spain; Ipko in Holland, and Berkshire in the U.K.