Kellwood Company and Phat Fashions, LLC announced the two parties have reached an agreement for Kellwood to acquire Phat Fashions, its licensing organization and its prized trademarks, Phat Farm®, Baby Phat®, and Phat®. The announcement was made at a press conference Thursday in New York City.
“Before coming to this decision, we studied the urban lifestyle market for some time. The market represents purchases by consumers at retail of approximately $10 billion on an annual basis. Diversity of markets, brands, consumers and channels is Kellwood's hallmark. We are pleased to add Russell and Kimora Lee Simmons; and Phat Fashions to the Kellwood family. Phat Farm and Baby Phat are highly sought after brands, and we believe they represent the crown jewels of the urban business,” said Hal J. Upbin, Kellwood chairman and chief executive officer.
“Since its inception in 1992, Phat Farm's revenues have grown dramatically every year. We are now at the point where we need the very best resources and infrastructure to build our underground phenomenon into a mainstream staple. Kellwood provides us with these opportunities. We are proud to be partners with the visionary team at Kellwood and look forward to developing Phat Farm into an institution that will inspire, uplift and bring together this generation of young Americans,” commented Russell Simmons.
Baby Phat was launched in 1999 under the creative guidance of Kimora Lee Simmons. Over the past five years, Kimora Lee has taken her personal sense of style and created a new paradigm within the fashion and business world with her unique vision of clothing and accessories. Primary licensing categories for Phat Fashions include apparel for men, women, and children; athletic shoes, and accessories. Beginning with the Fall 2004 season, Kellwood will produce the men's Phat Farm collection through its own menswear organization. The Company also plans to introduce new product categories that fit within its already existing capabilities and expertise such as intimate apparel for Baby Phat.
Phat Fashions will operate as a subsidiary of Kellwood. Simmons will remain at the helm of Phat Fashions as CEO. Kimora will continue as the principal creative arbiter for Baby Phat. The transaction is expected to close in early February.
Kellwood's partnership with Russell Simmons began in 2003 through two licensing agreements. The first one was in April for Run Athletics(TM) men's activewear collection, and the second in August for Def Jam University(TM) sportswear for young men and juniors.
“For two years, Russell and I have enjoyed numerous conversations, getting to know each other's business and markets, and exploring the viability of a Kellwood/Phat Fashions union. Our Kellwood team is energized to see this business venture come to fruition. This is a tremendous opportunity for Kellwood and Russell – and ultimately consumers and our retail partners,” added Robert C. Skinner, Jr., Kellwood president.
