NEW YORK — Everlast Worldwide Inc. is licensing its women’s apparel in order to focus on the company’s men’s business, as part of a strategy to streamline operations and cut costs.
The New York-based sport company has signed a licensing deal with activewear and innerwear firm Jacques Moret to take over the Everlast women’s apparel business in the U.S. starting Jan. 1.
The move is also part of a plan to build the Everlast brand through licenses. George Horowitz, Everlast’s chairman, president and chief executive officer, said in an interview that the change does not reflect any difficulties Everlast has had in the women’s arena.
“This is an opportunity to take the business to the next level,” he said. “We have been working in the same factories as Moret. Under this agreement, the women’s line will benefit from Moret’s abilities for sourcing, due to economies of scale.”
He said the move allows publicly held Everlast to target its men’s business, professional and retail boxing equipment and worldwide licensees.
Horowitz declined to reveal sales of the women’s business, but he said the category accounts for about 30 percent of the company’s domestic sales. Everlast had total revenues of $58 million in 2003.
Under the terms of the five-year deal, Jacques Moret Inc. will pay about $12.5 million in minimum guarantees to Everlast. At the end of that period, Moret has the option of signing a 99-year license for women’s apparel rights for about $30 million. This the second deal the two companies have sealed for women’s apparel: Earlier this year, Moret and Everlast signed a license for women’s apparel in Canada.
In addition, Moret will assume and pay for all women’s apparel inventory purchased by Everlast, future advertisements previously placed by the company and other transitional costs associated with the women’s business. Orders placed with Everlast for spring and summer will be shipped as part of an effort between Everlast and Moret.
Joey Harary, president of Jacques Moret, said his company sees opportunities to expand Everlast into new areas and categories, including more sportswear offerings, such as fleece tops and jerseys.
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“We don’t plan any changes in distribution,” Harary said.
Everlast women’s apparel was introduced in 1992 and is sold in department stores and specialty chairs. The line has gotten more fashion-forward in recent seasons. For spring it has added significantly more color, new silhouettes and a wider selection of lifestyle merchandise that can be worn for nonfitness activities.
Moret has agreed to hire a handful of key sales, merchandising and operational employees from Everlast.
Everlast has a wide range of licenses for products such as outerwear, watches, footwear and exercise equipment, and the company has been signing licensing deals with several international companies to expand its brand outside the U.S.
The deal gives Moret a strong brand name in the activewear arena. It sells products under its own brand names, including 2(x)ist, Jacques Moret and MoreUltra Activewear; it also makes products under private label.
Everlast shares surged $2.94 to close at $7.04 on Friday in Nasdaq trading after the deal was announced.