The industry’s acquisition activity hasn’t been this heated in years, resulting in a seismic shift as the big get bigger and the small- to medium-sized look for partners or other opportunities. Yet whenever an apparel firm is put up for sale these days, the same five companies are continually mentioned as possible acquirers: Jones Apparel Group, Kellwood Co., Phillips-Van Heusen Corp., VF Corp. and Liz Claiborne Inc.
The action has become so intense — from Ellen Tracy to Kasper, Nautica Enterprises to Calvin Klein Inc. — that it’s sometimes hard to keep track. So, here, WWD provides a scorecard on the new conglomerates — what they own, how much cash they have and their strengths and weaknesses as they all cope with managing multiple brands.
“Every company has its own strengths, and each one is culturally different. At the end of the day, it’s who will pay the best price,” said Allan Ellinger, senior managing director of Marketing Management Group.
Ellinger noted that most of the companies are buying firms to shore up their weaknesses. “All of these companies realize they have to change. In some cases, the companies they’re acquiring are entrepreneurships. To be successful, they have to meet the new culture midway.”
Paul Altman, vice president of the Sage Group, a Los Angeles-based investment banking firm, said there are a number of criteria that make a good acquisition partner, namely a company’s needs and its ability to support the brand. “The best mergers fulfill the needs of both parties,” he said.
Sage advised Juicy Couture on its sale to Liz Claiborne earlier this year. “Liz is a brand collector, but not in the business of developing brands of their own. They support the brand’s visionaries.” He said Claiborne trusted the vision of co-presidents Pamela Skaist-Levy and Gela Taylor at Juicy, and did the same at Lucky. “Very few people [consumers] know that Liz owns Juicy and Lucky,” he said.