Kellwood Co. has signed a deal to acquire CRL Group LLC, owner of the brand and trademark for Vince, the Southern California-based women’s contemporary collection.
The brand gives Kellwood, the $2 billion apparel manufacturer, an entry point into the higher-end contemporary market, adding panache to a portfolio largely weighted in moderate brands. Vince is expected to generate sales of $45 million this year. Terms of the transaction, which should be completed by the end of next month, weren’t disclosed.
“What we are trying to do is maximize our dominant position in moderate and at the same time increase our presence in higher-profile, high-growth lifestyle brands,” said Robert C. Skinner Jr., chairman, president and chief executive officer of Kellwood. “We are very disciplined when we do acquisitions — this is the first acquisition since Phat Farm in February 2004 — but when we see the right opportunity to build shareholder value with a brand like this, we will take it.”
Through its Phat Farm acquisition, the company also produces the Baby Phat urban contemporary collection.
CRL Group is owned by John Paul Richard Inc., Rea Laccone and Christopher LaPolice. Laccone will continue as ceo, and LaPolice will stay on as president of Vince for at least five years. LaPolice said all 36 people on the Vince team will remain on staff, and the only tangible change will be the shipping centers. Vince merchandise is shipped from Calabasas, Calif., and once the acquisition is effective, the collection will be shipped from Kellwood’s facilities in City of Industry, Calif. Vince will operate as part of Kellwood’s Western Region division.
“We are thrilled we will be able to realize our plans for the company through Kellwood,” said Laccone, who before Vince started Laundry in 1988 and built it into a sizable business. “Unlike with a lot of other large strategic partners, we really think we are going to mean something at Kellwood, and they are going to give Vince a lot of attention and a lot of potential to grow.”
Kellwood was represented by Banc of America Securities, and CRL Group was represented by the Sage Group LLC.
“Kellwood has had Vince in its sights for a while,” said Mark Vidergauz, ceo and managing director of the Sage Group, the Los Angeles investment banking firm. “This is a wonderful opportunity for Kellwood — it puts them into the high-end market. And they will be able to provide the back-office support for Vince to grow.”
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Vince began almost five years ago as a contemporary women’s sportswear collection, particularly known for its knitwear. The brand is sold at select specialty stores and high-end retailers including Barneys, Bergdorf Goodman, Neiman Marcus, Saks Fifth Avenue, Nordstrom and Bloomingdale’s.
Laccone predicted that Vince would generate more than $100 million in volume in the next couple of years. Under Kellwood’s ownership, Laccone and LaPolice plan to extend the brand through freestanding retail stores, subsidiary lines like Baby Vince, licensed accessories and international expansion.
“The beauty of having Kellwood as a partner is that they want to grow Vince in a comfortable way, where we can protect the products of the company and continue to operate with a focus on specialty stores and luxury retailers,” LaPolice said. “It is a wonderful position to be this jewel within this stable of brands. And with Kellwood looking to diversify as they are, it gives us this support to realize what we want to do.”
Kellwood’s portfolio of more than a dozen labels is based largely in the moderate market, with brands such as Sag Harbor, Koret and Miss Dorby. Much of its business is done through licenses, such as those with Oscar de la Renta and Calvin Klein for better sportswear. The Vince buy reflects Kellwood’s larger strategy to buy higher-end destination brands.