- L'Oréal Finalizes Nickel Purchase
- Tengram Invests in DevaCurl, Names President
- L'Oréal Sets Travel Retail Division
NEW YORK — Oxford Industries Inc. said on Monday that it sold its Womenswear Group to a division of Hong Kong-based Li & Fung in a cash deal valued at $67 million on an after-tax basis.
The deal is expected to close around the end of Oxford's fourth quarter, or about June 2. According to the terms of the transaction, the cash consideration at the close is $37 million. Other items after the closing, such as collection of retained accounts receivable and the sale of in-transit inventories, are expected to generate an additional $30 million in cash proceeds.
"Our Womenswear Group has made a significant contribution to our success over the years and the decision to pursue its sale has been very difficult. However, we believe this divestiture is an important step in the ongoing strategic repositioning of the company," said J. Hicks Lanier, chairman and chief executive officer of Oxford, in a statement.
Lanier said the sale will significantly improve the company's balance sheet, enable the company to grow its consumer brands and pursue acquisitions of similar businesses. Oxford said the cash proceeds plus the elimination of trade letters of credit connected with the women's wear business will increase the company's available borrowing capacity by $110 million.
Gilbert Harrison, chairman of investment banking firm Financo and Li & Fung's financial advisor in the deal, said, "The acquisition by Li & Fung reiterates their continued interest in expanding their private label business in the United States. It fits into their objectives and is a very positive move. From Oxford's point of view, it allows them to continue their strategy of building a lifestyle branded business."
According to Oxford's Web site, the Womenswear Group is a "major producer of budget and moderately priced private label women's apparel for mass merchant and catalogue retailers." The merchandise offering includes sportswear separates, coordinated sportswear, outerwear, dresses and swimwear.