Menswear retailer Tailored Brands Inc is selling the Joseph Abboud trademarks to WHP Global for $115m – but will retain the exclusive rights to sell and rent Joseph Abboud branded apparel and related merchandise in the US and Canada.
WHP Global is a New York based brand acquisition and management firm that also owns the Anne Klein fashion business. It says it intends to build the Joseph Abboud brand through international and category expansion.
The agreement is expected to close by the end of March, and Tailored Brands says it will use sale proceeds to strengthen its balance sheet.
“The Joseph Abboud brand has played and will continue to play an important role in the assortment at our retail brands,” says Tailored Brands president and CEO Dinesh Lathi.
“This transaction allows us to unlock value in the Joseph Abboud trademarks through an experienced partner that will focus on building the brand through international and category expansion.
“We plan to use the proceeds from the transaction for debt repayment, which will strengthen our balance sheet and provide additional financial flexibility to invest in our customer-facing transformation strategies.”
The designer Joseph Abboud will be leaving Tailored Brands at the end of January.
Tailored Brands, which also owns Men’s Wearhouse, Jos A Bank, Moores Clothing for Men and K&G, will continue to own and operate the factory in New Bedford, Massachusetts, that manufactures tailored clothing.
Analyst Susan Anderson at B Riley notes: “Joseph Abboud has been a strong point for TLRD, which we estimate to be about $600m in sales including licensing and rentals.”
In August, Tailored Brands agreed to sell its corporate apparel business for US$62m to a group led by the unit’s existing UK executive team.
In its most recent third-quarter, the Fremont, California based business saw its net earnings tumble 20% to $27.8m from $34.8m a year earlier. Total net sales were down 3% to $729.5m, with comparable sales slipping 2.2%.