Gazal Corporation, one of the largest branded apparel companies in Australia, is selling the European rights for its Mambo surfwear brand to outdoor clothing retailer Blacks Leisure Plc in a deal worth GBP1m (US$2m).

UK company Blacks operates through four fascias - Blacks, Millets, Freespirit and O'Neill - and already holds the UK and European license for Mambo under a five-year agreement signed in August 2006.

Gazal said it is still in negotiations over the Mambo trademarks in Australia and other international markets excluding Europe.

Sydney based Gazal bought Mambo in 2000 and has struggled to build it into a global brand.

The company, which supplies surf and casualwear, men's business shirts, intimate apparel and schoolwear under brand names including Nautica, Kenneth Cole, Van Heusen, Calvin Klein, Lovable, Kookai, and Body Nancy Ganz announced plans for a strategic review of Mambo in May.