Alex Apparel Group, a key supplier of better-priced social occasion dresses and separates, has acquired SL Fashions Group, which specializes in social and day dresses at moderate prices.
Executives from Alex Apparel, in confirming the deal to WWD on Friday, declined to cite the purchase price. An official announcement is expected Monday.
The acquisition by The Alex Apparel Group, which is part of the portfolio of Atlantic Street Group private equity firm, reflects efforts to capitalize on the ongoing strong trend in retail dress sales, which are outperforming sportswear sales. SL Fashions brings day dresses and private label into the mix at Alex Apparel.
Combined, Alex Apparel and SL Fashions represent more than $100 million in wholesale revenues.
Avalon Net Worth, which provides investment banking and financial advisory services to private and middle market companies, led Atlantic to SL Fashions and helped them negotiate a transaction.
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The New York-based SL Fashions, founded in the Seventies by Steve Grabow, designs, sources and distributes day and evening dresses and separates sold under the SL, JR Nites and Ignite brand names.
“Our two companies and cultures are very compatible and the addition of SL to the Alex family of brands will allow us to rapidly scale our businesses and develop new markets across the entire value-priced segment of social occasion eveningwear,” said Colleen Kelly, chief executive officer of Alex Apparel.
“In addition, SL will enable us to further develop important sales channels, including e-commerce, specialty chains and boutiques,” said Kelly.
Mitchell Grabow, president of SL, will continue in that role and also serve as executive vice president of business development for Alex Apparel Group.
Kelly said Alex Apparel is among the top three resources in department stores for better-priced, classic social occasion dresses. She also said SL ranks among the top three resources in department stores for moderate-priced day and social occasion dresses.
Macy’s, Dillard’s, Lord & Taylor and Nordstrom are major clients for Alex Apparel. Macy’s and Dillard’s as well as Steinmart, Stage Stores and certain specialty chains like David’s Bridal are among the major clients for SL Fashions.
“SL Fashions is an incredibly growing and profitable company. This is not a turnaround strategy,” said Kelly. “Mitchell has really moved his company into the future in terms of sourcing, speed to market and pricing strategies. Our infrastructure can support that business. We have strong planning and really good analytics. We can give his company the support to keep growing and growing. His formula is excellent. It’s all about being valued priced and he has hit the nail on fashion.”
Asked to cite some hot trends in the dress market, Kelly said, “We are still selling lace like crazy but in newer bodies with sleeve interest. We are also selling the midi length and we are definitely selling more colors than we had in the past,” particularly mother of the bride dresses in blushes and violets.
Peter Shabecoff, managing partner of Atlantic Street Capital, which acquired Alex in 2011, said, “Colleen and her team have greatly strengthened the relationship with many of the company’s key customers, making Alex Evenings a leader in the classic eveningwear market.”
Atlantic Street Capital invests in fundamentally sound middle market companies with between $4 million and $12 million in EBITDA and works closely with management to grow the businesses.
