Jeantex Nixes Merger with Sanatex
Huntington Beach, Calif.–based denim manufacturer Jeantex Group announced the termination of its letter of intent to purchase Carson, Calif.–based low-cost private-label manufacturer Sanatex Inc. The original Nov. 25 letter of intent called for Jeantex to acquire all issued and outstanding Sanatex stock in exchange for newly issued shares of Class A Jeantex common stock.
According to a statement, the split was mutual.
Sanatex, whose clients include Target Corporation; Kohl’s Corporation; Sears, Roebuck and Co.; and Wal-Mart Stores Inc., owns a manufacturing facility in the Private Free Zone in Kalubia, Egypt, which gives the company exemption from tariffs on finished goods shipped to the United States. Henry Fahman, chairman of Jeantex, originally indicated that Jeantex planned to use the facility to increase production for both companies.
Of late, Jeantex has sought to grow and diversify its business. “We remain focused on diversifying our product offering and will continue to create value for our shareholders as we build our business,” Fahman said in a statement. In December, the company announced plans to purchase high-end clothing design company Yves Castaldi Corporation, which designs and markets apparel under the Just Yves, I Generation and Instinct Yves brands. Yves is expected to achieve sales of $10 million this year.
Jeantex also announced new manufacturing contracts in December. The company will manufacture denim bottoms and T-shirts for licensing partners of Samsung, the Korean conglomerate, as well as premium denim for Stronghold Jeans and denim for Vikki Vi’s junior, missy and plus-size divisions. The company will also serve as a private-label denim manufacturer for Japanese department store Rope. —Erin Barajas
