Hampshire Group is Selling its Rio Garment Business
Hampshire Group is selling the Honduras-based knitwear manufacturer that it acquired for $23 million in 2011. A group led by Rio Garment’s management is buying the business from Hampshire for $6 million “plus the existing accounts receivable and certain other assets of Rio totaling approximately $5.0 million,” the companies said. Of that $5 million, $4.2 million will go to Hampshire’s lender.
Hampshire CEO Paul Buxbaum commented in a statement, “The beginning of 2015 has been a very difficult time at Hampshire with significant delays caused by the west coast port strike and events that led to a change in our CFO, which has adversely affected the company’s liquidity. Our opportunistic sale of the Rio Garment business will provide significant liquidity to our operations, while materially reducing the working capital requirements of the overall company. The decision to sell the assets of Rio will strengthen the company’s financial position and allow management to focus on growing the core business, which includes Dockers and new brands such as James Campbell. Entering into this sales agreement is a major step forward for Hampshire.”
CFO Trey Darwin was fired in early March after about two years in the role. William Drozdowski has stepped in as interim CFO.
Rio Garment S. de R.L., which was founded in 2006, designs and manufactures knit tops for U.S. retailers and distributors.
