NEW YORK — In another move to expand its brand portfolio, Russell Corp. said it will buy Brooks Sports, the Bothell, Wash.-based running gear company, for about $115 million in cash.
The $1.19 billion activewear giant expects its earnings for 2004 to come at the lower end of its previously announced earnings range of $1.45 to $1.55 a share. Last year, Russell earned $1.32 a share.
“Holiday sales results are mixed and certain retailers have not performed to their expectations,” Jack Ward, Russell’s chairman and chief executive officer, said in a statement.
The company’s shares were down 5 cents to $18.55 Tuesday in New York Stock Exchange trading.
The Brooks purchase will bring Russell into running specialty stores, where it doesn’t have much of a presence. Founded in 1914, Brooks is projected to have sales of $95 million this year. In addition to its core footwear offerings, the company makes a range of products such as sports bras, hooded sweatshirts, gloves, socks, hats and headbands, and is known for its use of technical fabrics.
“Brooks’ position as a leader in performance running products will provide a broader platform for Russell as we continue to expand our position in performance athletic products,” Ward said.
Russell sees opportunities to expand Brooks through a number of avenues, including apparel, and its track team business with high schools and colleges, he said.
Russell, based in Atlanta, has been building its brand portfolio in recent years. The company now owns Moving Comfort as well as Bike Athletic and Spalding, and this year, purchased equipment maker American Athletic and Huffy Sports.
For 2005, Russell said it will earn $1.55 to $1.65 per share on sales of $1.5 billion, including the Brooks acquisition and assuming a tax rate of 35 percent. The Brooks purchase is to be completed in early January.