PVH Agrees to Buy Superba
NEW YORK — Phillips-Van Heusen Corp. has agreed to buy Superba Inc., ending speculation that reached a fever pitch during the Las Vegas markets last month. The deal is expected to close before the end of 2006.
According to PVH chief executive officer Emanuel Chirico, the acquisition “provides us with a means to grow our business by layering in a new product category that complements our core competencies – in this case, our historical strength in dress shirts.”
Mervyn Mandelbaum, CEO and controlling shareholder of Superba, confirmed that the plan is for all current Superba management to stay intact and for the company to run as an independent subsidiary, as is the case with Calvin Klein, which was previously acquired by PVH.
The purchase price was given as $110 million cash, plus an earn-out of up to $70 million based upon earnings over the next three years. Superba’s annual sales volume is estimated at $140 million. The transaction, subject to customary conditions and approvals, is expected to close by the end of the calendar year.
Superba’s lengthy roster of licenses incudes Arrow, DKNY, Tommy Hilfiger, Nautica, Perry Ellis, Ted Baker, Ike Behar, Michael Kors, JOE Joseph Abboud, Original Penguin, Jones New York and Hart Schaffner Marx. Hand-tailored neckwear is offered through its Insignia division, and machine made neckwear through its Superba unit.
In a statement, Mandelbaum said, “This combination is all about growing our business over the long term. PVH is a leader in implementing the multiple brand, multiple channel, and multiple price point strategy we have been using in the neckwear category and we believe they can bring us to the next level of performance through the strength of their brand management, marketing expertise and leveraged infrastructure.”
PVH’s Chirico said the Superba acquisition is expected to be “modestly accretive” to 2007 earnings after consideration of integration costs. He also said he believed Superba’s Los Angeles manufacturing base an advantage, “both because of the quality of the ties produced there, as well as the reduction in time needed to get their product on customers’ floors.”
In addition to Calvin Klein, PVH’s roster of owned brands includes Van Heusen, Izod, Arrow, Bass and G.H. Bass & Co.
