Kellwood Co said late Wednesday (13 June) that it had reached an agreement to acquire upscale children's apparel maker Hanna Andersson Corp for approximately US$175m.

The acquisition is expected to be completed during the second quarter and, after purchase accounting, be accretive to Kellwood's earnings in its first full year.

Based in Portland, Oregon, Hanna Andersson markets better colourful children's apparel through its catalogues, web site (HannaAndersson.com) and 18 retail stores. Revenues in 2006 were approximately $100m.

The sellers include Castanea Partners, Dorset Capital and company management. Philip Iosca, president and CEO, will continue to head the management team out of Portland.

"The Hanna Andersson acquisition complements our business and brand portfolio corporate strategy in several ways," said Robert Skinner Jr, chairman, president and CEO of Kellwood.

"As we have stated, one of our goals is to expand into upscale brands, and Hanna Andersson positions Kellwood in the better category of children's apparel.

"Another part of our strategy is to connect more directly with the consumer. The Hanna Andersson business model is focused on a direct to consumer format with a rich media e-commerce site, colourful catalogues, and an inviting store format."

He added that the acquisition fits well with the "successful and strong children's business platform" established by Kellwood's earlier purchase of Gerber Childrenswear.

Hanna Andersson was founded in 1983 by a Swedish mother, Gun Denhart, and her American husband, Tom, and named for Gun Dunhart's grandmother.

"It's terrific to know the little company Tom and I started with a simple commitment to the customer, high quality and a strong sense of corporate responsibility has the opportunity to partner with Kellwood to help Hanna realise its full potential," Gun Denhart said.

While Kellwood has steadily made acquisitions over the last few years, its most recent have tended towards upscale merchandise.

It completed its acquisition of the Vince brand of contemporary women's sportswear last October and acquired Hollywould, a better shoe and apparel marketer, last December.
 
By Arnold J Karr.