High-end denim company Blue Holdings has signed a deal to buy retailer Long Rap, which operates stores under the Up Against the Wall name.

The definitive merger agreement will allow Blue to add 27 retail stores to key locations such as Los Angeles, Miami, Las Vegas and other locations across the country.

Under the terms of the deal, Blue will pay the shareholders of Long Rap US$16m in cash and the same amount in common stock.

The transaction has been approved by the respective boards of directors of both Blue and Long Rap and is expected to close by September.

"This strategic acquisition of Long Rap brings our retail vision into reality and saves us both the time and money to build everything from scratch," said Paul Guez, chairman, CEO and president of Blue.

"The merger also brings to us an experienced team of professionals who will be able to run the retail operations efficiently and profitably. This combination of Up Against the Wall's retail stores and Blue Holdings' strong brands and beautiful products will create a very powerful and profitable enterprise. The merger is expected to be accretive to Blue Holding's earnings in the second half of 2007."

Long Rap's CEO Charles Rendelman said: "With the resources of Blue Holdings and the three Blue Holdings brands behind us, my team and I will be able to execute the vision of growth that we have had for years. I feel very excited about the future of this merger with Blue Holdings and look forward to building up a very profitable organisation for the shareholders."

Blue Holdings, directly and through its wholly owned subsidiaries Antik Denim and Taverniti So Jeans, designs, develops, manufactures, markets, distributes and sells high-end fashion jeans, apparel and accessories with a Western flair.

Long Rap's stores sell high-end brands such as LRG, Coogi, Antik Denim, True Religion, Seven for all Mankind and Taverniti So Jeans. The company currently has 24 stores in California, Maryland, Washington DC, Florida and Virginia, and is opening three more in Las Vegas, Nevada, and Sacramento, California, in the second half of this year.