Perry Ellis International seems to be taking a closer look at the Action Sports industry, changing its Swim division into an Action Sports/Active group after acquiring the Gotcha brand and its trademarks. PERY took its actions in the industry a step further, naming former Hurley Brand president, Seth Ellison, as president of the new group.

Mr. Ellison will be based out of the Redsand office in Irvine, Calif. where he will oversee the merchandising, sales, and operations for all of PERY’s youth lifestyle and swim brands, including Redsand, Jantzen, Nike swim, and the newly acquired trademarks from Gotcha International.

Mr. Ellison had served as a key executive at Nike, Inc. since 1996, most recently as a Nike vice president and president of Hurley International. He was responsible for launching the Hurley youth lifestyle brand and expanding its global presence through subsidiaries, satellite offices, retail stores, and license agreements.

Perry Ellis signed a definitive asset purchase agreement to acquire primarily all of the worldwide intellectual property of Gotcha International, including the Gotcha and GirlStar trademarks and the intellectual property license agreements including MCD.

The cash transaction is expected to close in January 2006, subject to satisfaction of closing conditions set forth in the asset purchase agreement. Currently, Gotcha is sold through surf, specialty, and department stores in 20 countries across five continents, generating roughly $70 million in annual sales.

PERY expects the acquisition to the deal will be somewhat transitional, as PERY works through some current licensing deals before taking over design and development of the Gotcha brand for the Holiday ‘06 deliveries.

The addition of this business comes as PERY works through the exit of the Ocean Pacific, Hilfiger swim, and Nautica licenses, and the loss of a great deal of their tops business at Sears. The OP license exit cost them about $3 million in sales to JC Penney alone.

The company indicated that the transaction will be slightly accretive to Perry Ellis' fiscal 2007 revenue and earnings, adding “a few cents” to fiscal ‘07 earnings, with further benefits expected in fiscal ‘08 and beyond.

>>> Next up is the re-negotiation of the expiring Nike Swim license, a deal that is expected to be announced by mid-December…