PVH Corp. signed a definitive agreement to sell substantially all of the assets of its G.H. Bass & Co. footwear division to G-III Apparel Group, Ltd. for approximately $50 million in cash. The transaction is expected to close in the beginning of the fourth quarter.
PVH acquired G.H. Bass, which sells significantly through its 160 outlet stores, in 1987. But Emanuel Chirico, PVH’s CEO, said PVH’s ”core competencies today lie in our lifestyle apparel businesses and we see the future of PVH focused around the global growth of our designer lifestyle brands, led by Calvin Klein and Tommy Hilfiger.”
Morris Goldfarb, president and CEO of G-III said, “We are delighted by the prospect of adding such a strong heritage brand to our portfolio. We are confident that the addition of approximately 160 G.H. Bass & Co. outlet stores will integrate well into our retail platform and provides us with a powerful opportunity to continue to grow and diversify our business.”
PVH expects to incur a pre-tax loss of approximately $20 million in connection with the sale of assets, and expects the overall transaction to be approximately 15 cents dilutive to its EPS on a full year basis. PVH plans to use the proceeds received from the transaction to make additional debt prepayments in 2013.
For G-III, the transaction is expected to be approximately 10 cents dilutive to net income per share for its current fiscal year ending Jan. 31 and accretive thereafter on an annual basis.
