Randa Accessories is finally making its long-desired jump into the apparel end of the business.
On Tuesday, the New York-based company revealed that it has entered into a definitive agreement to acquire 100 percent of Haggar Clothing Co. Terms were not disclosed, but the transaction is expected to close on May 31. The acquisition also includes the Tribal women’s brand.
Haggar is believed to have sales of around $500 million and Randa revenues of about $700 million, so the combined company would have sales of more than $1 billion.
Haggar’s headquarters will remain in Dallas and the current management team, headed by chief executive officer Michael Stitt, will remain intact.
A little over a year ago, Randa was locked in a battle with George Feldenkreis to acquire Perry Ellis International. Ultimately, Feldenkreis prevailed but Randa’s management was determined to regroup and find another brand that would allow it to expand beyond accessories, where it dominates the market.
That opportunity arose with Haggar, a privately held, 93-year-old, Dallas-based brand whose founding family sold the business in 2005 to private equity firm Perseus LLC and Taiwan-based Pou Chen, the world’s largest footwear manufacturer, which has been the sole owner for the past several years.
Stitt said Pou Chen had informed him around six months ago that it wanted to sell the company and retained a banker in Asia to make a deal. “There was multiple interest in Asia and North America,” he said, “but ultimately the ownership group asked me what I thought and I said Randa was the best strategic fit. Both companies are complementary but non-competing.”
Haggar is the number-one seller of dress pants in the U.S., and the number-two non-denim pant seller. It also operates 80 retail stores — primarily premium outlets — and has an e-commerce site.
Randa is funding the acquisition through a combination of cash on hand and committed financing provided by Wells Fargo Bank, National Association and JPMorgan Chase Bank, N.A., according to David Katz, executive vice president and chief marketing officer of Randa.
Since the Perry Ellis deal, “we’ve been on the hunt and ready to do a transactional acquisition of a brand with strong consumer recognition, a retail presence and geographic reach,” he said.
“The acquisition of Haggar is an important waypoint on our strategic journey,” said Jeffrey Spiegel, ceo of Randa. “This transaction brings together two successful, financially strong, and complementary businesses to better serve our retail and brand partners, our associates, and our consumers.”
Katz said the addition of Tribal, the largest women’s sportswear brand in the specialty store channel, is also viewed as a positive. Randa’s core distribution is men’s accessories in the department and mass channel. The Tribal headquarters and team will remain in Montreal.
“For many brand, apparel and accessories powerhouses, the acquisition of a widely recognized and broadly distributed brand represents a significant inflection point in their growth and path to success,” Katz said. “Similarly, Randa looks forward to this acquisition marking a milestone on our journey toward becoming a global leader in lifestyle brands and expanded classifications.
“This acquisition illustrates our commitment to becoming better at what we do best: entering new and adjacent markets and investing in our future,” he added.
Katz said Randa views accessories as a “gateway to building and expanding successful lifestyle brands. For many years, Hermès made only horse saddles, Louis Vuitton made only trunks, Ralph Lauren made only ties and Abercrombie sold fishing tackle. Today these companies are multiclassification lifestyle brands. This apparel acquisition is our gateway to greater success.”
Randa, a privately held company founded in 1910, produces belts, wallets, headwear, slippers, luggage, neckwear, jewelry and other accessories under 50 brands and licenses, including Levi’s, Tommy Hilfiger, Columbia Sportswear, Dickies and Kenneth Cole. It distributes its products globally through more than 20,000 stores and employs 4,000-plus associates at 26 offices located in 10 countries.
“Randa is the ideal strategic partner for Haggar as we think about the combined strengths of our two companies,” Stitt said. “Jeff, and his extraordinary leadership team add invaluable scale, resources, expertise and marketing, in addition to retail partnerships. They align with our core values and high standards.”