In a move designed to bulk up its apparel business to create a head-to-toe lifestyle brand, New Era Cap Co., Inc. acquired 5th & Ocean, the sports licensing firm known for its fashion-forward women's styles.


Terms were not disclosed.  5th & Ocean, a privately held firm, is a minority-certified manufacturer of licensed team sports and private-label items ranging from fleeces and tank tops to hooded sweatshirts and athletic shorts. It makes product under licenses with MLB, NBA, NFL as well as almost 200 colleges. Private label clients include Victoria's Secret, the Dallas Cowboys, Planet Hollywood, Ron Jon Surf Shop, Graceland, Disney Theme Parks and VF Imagewear.


Current management, led by Alex Leiter, CEO, is staying and the business will continue to operate out of Miami. In an interview with Sports Executive Weekly, New Era's President Pete Augustine said sales and product teams will be working together to some degree, but 5th & Ocean will run mostly as a stand-alone business.


Augustine said 5th & Ocean has been growing despite the tough environment, but New Era was particularly attracted to the synergies the combined companies could attain based on selling to similar points of distribution and the ability to leverage each other strength's in different parts of the business.


“Another factor was we felt attitudinally we had a similar approach to how to run a business,” added Augustine. “We are both family run businesses, where the team matters more than the individual; where folks chip in to do what’s necessary to get the job done. Where pride is taken to producing quality product.” 


The acquisition also diversifies New Era's business and should prove particularly helpful in expanding New Era's new apparel collection. New Era first introduced apparel in 2007 and Augustine said the company feels “we’ve begun to find our footing in apparel.” A branded basics program has been successful with key retailers such as Downtown Locker Room while its Tradition by New Era line of collegiate apparel has been very well received on campuses at Follett controlled retail outlets.  One clear opportunity, Augustine noted, is capitalizing on headwear/apparel hook-up opportunities in women’s.

“More than anything else, this gives us scale and greater expertise in apparel,” said Augustine. “The fact of the matter is that we’ve long been a headwear company and that was the focus for the vast majority of our employees. We’ve now bought a company is apparel centric in their outlook and focus. They eat, sleep and drink apparel and we are confident we’ll benefit from that. All while the core part of our team remains as focused as ever on continuing to drive headwear sales.”
Ralph Garcia, chief operations officer at 5th & Ocean, told SEW his company has been growing “very rapidly” over the last five or six years and was looking for a partner with the resources to support its aggressive growth. In addition, with its focus on licensed and private label sales, management had been looking to build a brand.


“New Era is a very strong brand with an 80 year history and we're looking forward to helping bring that into apparel,” said Garcia. “We bring apparel knowledge that they don't have in a fashion forward concept that goes very well with their model around hats.”


Although both companies are in different categories, Garcia said both are focused on quickly responding to emerging fashion trends. 5th & Ocean imports most of its product from the Dominican Republic to achieve that quick turnaround.


“We both have a similar approach in reacting to fashion,” said Garcia. “What we do in apparel, they do in caps.”


Regarding New Era's business, Augustine said its most prominent headwear style, the 59FIFTY, “has continued to show vibrancy in the market despite an overall tough business climate.” But overall sales are down due to overall slowed consumer spending and focus has been on reducing inefficiencies and preserving profits. At the same time, he expects 5th & Ocean, which represents New Era's first acquisition, to help New Era with its mission of becoming a well-rounded lifestyle brand.


“It’s been a focus for some time now to grow beyond headwear to be a lifestyle brand and company,” said Augustine. “We’re confident 5th & Ocean will help set us up for future success in that endeavor.”