California Apparel News

Los Angeles–based Sequential Brands, known for its William Rast and People’s Liberation labels, announced March 29 that it acquired theCaribbean Joe and Ellen Tracy brands.

The purchase price was $62.3 million in cash plus 2.8 million shares of Sequential stock.

Both Ellen Tracy and Caribbean Joe currently are licensed to leading licensees, including Li & Fung, Komar and G-III Apparel Group.

Sequential estimates that these two brands together will generate between $12 million and $14 million in royalty revenues in the next 12 months.

“Today’s acquisition represents the completion of Sequential’s base platform, as we acquired two strong brands and a proven activation team led by Rick Platt, who joins Sequential as group president, brand management,” said Yehuda Shmidman, Sequential’s chief executive, in a statement. “With the addition of both Ellen Tracy and Caribbean Joe, Sequential’s portfolio now includes six brands that have more than 50 licensees and an expected run rate of close to $1 billion in retail sales worldwide. With our brand-management platform in place, our plan is to focus on growing each brand in our portfolio while aggressively pursuing new brands as well.”

Sequential’s other brands include DVS Action Sports and Heelys.

The Los Angeles company’s financing efforts were led by Bank of America, which gave Sequential a $45 million loan and led a separate group that provided an additional $20 million loan.

With six brands in its stable, Sequential expects to receive $23 million to $25 million in royalty revenues in the next 12 months.

Meanwhile, Sequential Brands reported its fourth-quarter and year-end financial results.

Revenues for the fourth quarter, ending Dec. 31, were $1.8 million, compared with $400,000 during the same period a year ago. Net loss for the fourth quarter was $7.3 million or $3 per share, compared with $3.4 million, or $1.41 a share, a year ago.

Revenues for fiscal 2012 were $5.3 million, compared with $500,000 for 2011. Net loss was $9.1 million, or $3.78 a share, for fiscal 2012, compared with $2.3 million, or $0.97 a share, the previous year.

“2012 was a transformational year for the company as we closed down our wholesale and retail operations and relaunched our company under a new name,” Shmidman said in a statement.

Sequential Brands used to be called People’s Liberation and made clothing under the William Rast and People’s Liberation labels.