California Apparel News

Mergers-and-acquisitions activity was alive and well in the apparel industry in 2015.

While some mergers joined two economic powerhouses, others basically spelled a label’s transition from a vibrant company to a trademark that will be used to sell everything from T-shirts and togs to purses and perfume.

One label sold in a fire sale was the venerable Frederick’s of Hollywood lingerie brand. After the company, founded in Los Angeles in 1946, filed for bankruptcy and closed all 93 of its stores, Authentic Brands Group bought the label for $22.5 million. Authentic Brands said it planned to sell Frederick’s of Hollywood lingerie online.

In addition to online sales, Authentic said it hoped to expand Frederick’s products and distribute them in department stores and specialty stores in North America, Europe, Asia, South America and Latin America. New products will include perfume and personal-care items.

Another label sold for its name was C&C California, a T-shirt and apparel company bought by Perry Ellis International some seven years ago. In March, Perry Ellis sold C&C California’s intellectual-property rights and trademark to Los Angeles–based ACH C&C Inc., a newly created venture by members of ACI Licensing. Terms of the deal were not disclosed.

Oscar Feldenkreis, president and chief operating officer of Perry Ellis, said the sale reflected the Miami company’s desire to concentrate on higher-margin brands such as Perry Ellis, Original Penguin, Rafaella, Laundry and Golf lifestyle apparel.

In the world of juniors and misses apparel, The Gores Group sold clothing manufacturer Big Strike for an undisclosed amount to Arlington Global Financial Limited, a Los Angeles entity made up of shareholders with decades of experience in the apparel industry and that also holds an interest in One World Apparel LLC and Unger Fabrik.

Four years earlier, Los Angeles–based private equity firm The Gores Group bought a 70 percent interest in Big Strike for around $100 million.

Big Strike, based in Gardena, Calif., has several labels including Heart Soul, Soulmates, Workshop, Tracy Evans, Free to Love, Halo and Star City.

On the pajama front, P.J. Salvage was sold in July to Delta Galil Industries Inc., based in Tel Aviv, for an undisclosed price. P.J. Salvage will be operating as part of Delta Galil USA.

P.J. Salvage was founded some 20 years ago by Mickey Sills but sold two years later to Peter Burke, who established the company’s headquarters in Irvine, Calif., where he expanded the venture to become a well-known loungewear and pajamas company. Burke is planning to stay on as the chief executive.

In August, Genetic Denim, the Los Angeles premium-jeans label started nearly a decade ago, was acquired by a small investment group that brought in veteran apparel executive Hubert Guez to help turn the company around. The acquisition price was not disclosed.

Genetic Denim was launched in 2007 by Ali Fatourechi, who crafted a high-end denim pant that sold in the $200 price range at luxury stores such as Nordstrom, Neiman Marcus, Barneys New York and Bloomingdale’s.

Genetic Denim’s new owners plan to continue selling the brand at high-end stores but with a retail price point that will be around $150. All the jeans and denim pieces will be manufactured in a sewing factory in South Los Angeles, using the same quality denim fabric that was employed before. The new owners hope to capitalize on domestic production and turn goods quickly to keep up with fashion trends.

One of the bigger mergers of the year was in the financial realm of the apparel industry. CIT Group, the largest apparel factor in the United States, merged with OneWest Bank in Pasadena, Calif., in a deal worth $3.4 billion.

OneWest Bank was a privately owned regional bank founded in 2009. It had 73 retail branches in Southern California and $23 billion in assets, including commercial and residential mortgage loans and $15 billion in deposits.

Following the close of the transaction last August, CIT Bank, CIT’s banking subsidiary, merged with OneWest Bank under the CIT Bank name.