NEW YORK – Premium denim and sportswear brand True Religion has elected to focus “on our own current growth initiatives” rather than pursue a strategic alternative.
The company, based in Vernon, Calif., had retained Goldman Sachs “to help us evaluate various strategic options for maximizing shareholder value,” said Jeffrey Lubell, chairman and chief executive officer of True Religion, in a statement released early Tuesday. “We have been presented with and have thoroughly explored a number of strategic opportunities over the past year and have come to the conclusion that focusing on our own current growth initiatives ultimately serves to best enhance the long-term value for all our shareholders.”
Lubell noted that, based on the company’s financial plans, company executives consider the company’s stock to be undervalued. “Our consumer direct segment is expected to grow significantly in the next three years, with our eight retail stores today growing to 14 stores by year-end,” the CEO noted. “We anticipate that this segment will grow rapidly in 2008 and 2009, reaching at least 50 stores by the end of 2009, which we believe should expand our operating margin. We also expect to continue to grow our wholesale and licensing businesses in the U.S. and internationally.”
In the first hour of Nasdaq trading Tuesday, the company’s stock was down $0.27, or 1.4%, to $19.37. Its 52-week high, reached last Oct. 16, was $23.88, and the corresponding low, hit on Nov. 29, was $14.65.
True Religion is among the companies attempting to make the transition from a hot, trendy premium denim label into the more select company of upscale sportswear brands. Its products are available not only throughout North America but in South America, Europe, South Africa, the Middle East, Korea, Japan and China as well.