Two top socks firms, Gold Toe Investment Corp. and Moretz Inc., have merged as part of a deal involving their acquisition by private equity firm The Blackstone Group.
Terms of the deal were not disclosed.
Gold Toe, headquartered in Burlington, N.C., was founded in 1934 and sells its socks primarily to department stores under that brand name. It also sells them through its 11 direct retail outlets throughout the U.S.
Moretz, based in Newton, N.C., markets athletic styles under the PowerSox brand name, as well as under the Kathy Ireland, New Balance, Under Armour and Coleman brands through licensing partnerships. It also develops private label programs for Gap, Old Navy, Cherokee, Exhilaration, Pro Spirit, Athletic Works, Merona and Faded Glory.
“Gold Toe is an incredible brand and has a huge market share in department stores,” said John Moretz, chief executive officer of Moretz. “Gold Toe is also branching into other channels, such as the discount channel, which is where Moretz has a lot of expertise. We think, therefore, that we can help them grow and that then they can help us position some of our brands that would be appropriate for the department store.
“Together we can also consolidate certain expenses and increase our product innovation. It’s really a possibility to cross-pollinate our businesses and in the end provide more for the customer.”
James A. Williams, president and ceo of Gold Toe, said, “The merger provides us with continued diversification and synergy at the same time. Especially following the continued consolidation of the retail industry, this gives us a chance to compete both in the department store and mass market.”
The senior management teams of Gold Toe and Moretz are anticipated to remain in place following the merger. The Blackstone Group will be the majority owner of the combined company. John Moretz will be the second-largest shareholder. The current majority owner of Gold Toe, Vestar Capital Partners in New York, will retain a minority stake.
Gold Toe was advised by Bear Stearns & Co. Inc. and Devon Value Advisors. Moretz was advised by Financo Inc.