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Adidas to Sell TaylorMade, Adams Golf and Ashworth to KPS for $425M

Adidas to Sell TaylorMade, Adams Golf and Ashworth to KPS for $425M

Adidas began actively seeking a buyer last year, as reported by ExitHub. “TaylorMade is a leading global golf brand with an exceptionally strong market position. We would like to thank all TaylorMade employees for their many contributions to our company and wish them all the best for a successful future under their new ownership. At the same time, we welcome all adidas Golf employees who will be integrated into our adidas Heartbeat Sports Business Unit,” said Adidas CEO Kasper Rorsted. “Within our long-term strategy ‘Creating the New’, our focus is clearly on our core competencies in footwear and apparel and on our two major brands adidas and Reebok.” Adidas designs, develops, produces, and markets athletic and sports lifestyle products worldwide. It operates through 13 segments: Western Europe, North America, Greater China, Russia/CIS, Latin America, Japan, Middle East, South Korea, Southeast Asia/Pacifc, TaylorMade-adidas Golf, Reebok-CCM Hockey, Runtastic, and other centrally managed businesses. The company was formerly known as adidas-Salomon AG and changed its name to adidas AG in June 2006. adidas AG was founded in 1920 and is headquartered in Herzogenaurach, Germany. Employing more than 60,000 people in over 160 countries, the company produce more than 840 million product units annually and generated sales of €19 billion in 2016. Guggenheim Securities LLC acted as exclusive financial advisor to adidas AG and Sheppard, Mullin, Richter & Hampton LLP served as legal counsel. Going forward, Adidas intends to focus its efforts in this market segment on further strengthening its position as a leading provider of innovative golf footwear and apparel through the Adidas Golf brand, the company says. TaylorMade Golf Company In the spring of 1979 a golf equipment salesman named Gary Adams took out a $24,000 loan on his home and founded the TaylorMade Golf Company. He rented a 6,000 square-foot building that at one time housed a television assembly plant. Counting him, there were three employees and a single, innovative product: a 12-degree driver cast of stainless steel. This new metalwood looked and sounded different from a wooden wood, and most important, it performed differently. The clubhead’s perimeter-weighting offered greater forgiveness on mis-hits, while the lower center of gravity made it easier to launch the ball in the air. Adams, the son of a golf professional, was adamant that TaylorMade clubs maintain ties to what true golfers perceived an authentic golf club should look and feel like. They were committed to combining innovation with authenticity, to always be passionate about the game, and pledged to be competitive – to work hard to establish itself and grow. These four tenets would take them far. The same values singled out 30 years ago by Gary Adams are still revered and practiced today at TaylorMade, adidas Golf and Ashworth. Starting with $47,000 in sales in 1979, the company eventually reached its first billion dollars in revenue in 2006, marking only the second time in history that a golf brand had achieved this milestone. TaylorMade was independently owned until 1984, when Salomon SA acquired the company. At the time, the union was strategically compatible for both companies which were innovators in their industries: Salomon wanted to diversify and made the decision to enter a “three-season” market, and TaylorMade benefited from the worldwide resources of Salomon. Adidas bought Salomon in 1997, and shortly thereafter the image and focus of TaylorMade were redirected to take over the driver market. The company succeeded in achieving this goal in late 2005, when it officially became the top driver in golf. PGA Tour Professionals are said to play more TaylorMade drivers than Callaway, Cleveland, Cobra, Nike and Ping combined. Currently, the company markets TaylorMade drivers, fairway woods, hybrids, irons, wedges, golf balls and accessories. The company’s major equipment claims, promoted in marketing materials with small “No. 1” shields, include: No. 1 Driver in Golf, No. 1 Fairway in Golf and No. 1 Irons in Golf.]]>

Montreal's Gildan to Acquire Bankrupt Teenage Fashion Icon American Apparel for $66M

Montreal's Gildan to Acquire Bankrupt Teenage Fashion Icon American Apparel for $66M

In August 2016, American Apparel was said to have hired investment bank Houlihan Lockey to explore an exit, as reported by ExitHub at the time. However, by November American Apparel voluntarily filed for Chapter 11 bankruptcy protection once again. The bankruptcy court may require American Apparel to hold an auction for its assets and business under which the proposed acquisition would constitute the initial bid. Consummation of the acquisition would be subject to Gildan being selected as the successful bidder in any such auction and bankruptcy court approval. Gildan will be entitled to a break-up fee and certain expense reimbursements if it does not prevail as the successful bidder at any such auction. The American Apparel brand would represent a complementary addition to Gildan’s portfolio of brands. The acquisition would create revenue growth opportunities by leveraging Gildan’s extensive distribution network in North American and international printwear markets to further increase the brand’s penetration in the faster growing fashion basics segments of these markets. In addition, with American Apparel’s strong heritage as a consumer brand, Gildan said it will evaluate potential wholesale opportunities for leveraging the brand within its Branded Apparel business. Gildan is a leading manufacturer and marketer of quality branded basic family apparel, including T-shirts, fleece, sport shirts, underwear, socks, hosiery, and shapewear. The company sells its products under a diversified portfolio of company-owned brands, including the Gildan, Gold Toe, Anvil, Comfort Colors, Alstyle, Secret, Silks, Kushyfoot, Secret Silk, Peds, MediPeds and Therapy Plus brands. Sock products are also distributed through the company’s exclusive U.S. sock license for the Under Armour brand, and a wide array of products is also marketed through a global license for the Mossy Oak brand. The company sells its products through two primary channels of distribution, namely printwear and retail markets. Gildan distributes its products in printwear markets in the U.S., Canada, Europe, Asia-Pacific, and Latin America. In retail markets, the company sells its products to a broad spectrum of retailers primarily in the U.S. and Canada and also manufactures for select leading global athletic and lifestyle consumer brands. Gildan owns and operates vertically-integrated, large-scale manufacturing facilities which are primarily located in Central America, the Caribbean Basin, North America, and Bangladesh, with over 48,000 employees worldwide.]]>

Desmarais, Power Corp $POW Set Stage for Takeover of $PSG Performance Sports Group

Desmarais, Power Corp $POW Set Stage for Takeover of $PSG Performance Sports Group

Sagard Capital Partners, a subsidiary of global conglomerate Power Corporation of Canada (TSX: POW) which has a market capitalization of CAD $12.76 billion (USD $9.82 billion), and is the largest shareholder in financially distressed Performance Sports Group Ltd. (NYSE/TSX: PSG) with a stake of roughly 17%, said it may consider or propose a restructuring, an acquisition of indebtedness or of additional equity securities, or the acquisition of all of PSG. In light of PSG’s recent public announcement that it has retained Centerview Partners LLC to assist “in the review and evaluation of strategic alternatives,” and the postponement of PSG’s 2016 annual meeting of shareholders and 10-K annual report filing, Sagard Capital and PSG confirmed they ended their “standstill” agreement and previously announced “shareholder nomination,” delaying the appointment of Sagard’s executive chairman Paul Desmarais III to the board of PSG. The move quietly sets the stage for the resourceful Desmarais family to potentially save and take over PSG, or assume a more significant role in the company, which has its roots in Canada. “The Desmarais family controls Power Corp. of Canada, whose interests include stakes in giant companies on three continents. The clan is sometimes described as the closest thing Canada has to business royalty, its power amplified by close ties to presidents, prime ministers, bureaucrats and business titans all over the world,” says The Wall Street Journal. “Their grandfather built it. Their fathers expanded it. Now the fate of one of Canada’s biggest corporate empires is in the hands of two 34-year-old cousins who are largely untested in the business world,” namely Paul Desmarais III, and Olivier Desmarais. The Desmarais family owns Domaine Laforest, a 77 square kilometers estate at Sagard, in Quebec’s pine-forested Charlevoix region, which spawned the name of their eponymous private equity firm Sagard Capital. In 2013, the family patriarch Paul Desmarais died at the estate, which has hosted French President Nicholas Sarkozy, U.S. President Bill Clinton, and both Presidents Bush. According to the National Post, he was the richest man in Quebec, and among the 10 richest in Canada.

“In the remote hills of the Charlevoix region, where the Sauguenay meets the St. Lawrence River two hours from Quebec City, lies one of Canada’s best but least known courses. Built exclusively for the family of Canadian business legend, Paul Desmarais, the course lays out magnificently on a gorgeous and compelling landscape. Maintained to a standard rivalling Augusta National, Domaine Laforest is truly one of golf’s hidden gems.”  –Tom McBroom, award-winning Canadian golf course architect.
Power Corporation had over CAD $1.36 trillion (USD $1.05 trillion) in assets under management at December 31, 2015. Among its multiple other holdings, through its Square Victoria Communications subsidiary which controls Gesca, Power Corporation holds La Presse, Canada’s French-language news medium of record. PSG shares jumped over 31% on September 2, closing at USD $3.56 on the New York Stock Exchange, which brought its market capitalization to USD $162.22 million, and its enterprise value to USD $625.16 million. In its most recent 10-Q filing, PSG reported $587.3 million in total debt, and $2.58 million in cash on hand, for its fiscal 2016 third quarter ending on February 28, 2016. Quarterly revenues totaled $126.1 million, declining 8.5%, and Adjusted EBITDA was a loss of $11.0 million, compared year-over-year to Adjusted EBITDA of $14.6 million. Net loss totaled $188.1 million, compared y-o-y to a net loss of $12.5 million. PSG said earlier in the week it retained investment banking firm Centerview Partners LLC to explore strategic alternatives and advise on financial restructuring options, as its creditors granted it a 60-day extension to file its 10-K report. PSG was also granted continued access to borrowings under its revolving credit facility, which provides it with liquidity to fund operations. Bank of America NA is acting as administrative agent and collateral agent for the lenders. Exeter, New Hampshire-based PSG is a leading developer and manufacturer of high performance sports equipment and apparel. It is the global leader in hockey with the strongest and most recognized brand, and a leader in North America in baseball and softball. PSG’s products are marketed under the Bauer, Mission, Maverik, Cascade, Inaria, Combat and Easton brand names and are distributed throughout the world. The company, which has experienced multiple leadership changes in recent years, is said to be conducting an internal investigation. PSG is also the subject of investigations by the SEC and Canadian authorities, and is a defendant in a consolidated class action suit in New York, according to NHBR. The plaintiffs reportedly allege that PSG pressured retailers into ordering merchandise to artificially inflate revenue and mislead investors. In June 2016, the company appointed Harlan Kent as its new chief executive and as a member of its board of directors. Kent is the former president and CEO of Yankee Candle Inc. In January 2016, PSG acquired the Easton Hockey business of Easton Hockey Holdings Inc. from New York-based private equity firm Chartwell Investments, which had previously acquired Easton in 2014 from BRG Sports, reportedly for roughly $20 million with little or no money down. Around the same time, PSG’s former chairman, Graeme Roustan, who left the company’s board in 2012, filed a lawsuit in Canada against accounting firm Grant Thornton for breach of contract and defamation in connection with a battle over the retailer’s strategy. Roustan, who as of December 2015 held a 1.39% stake in PSG, had been seeking to take PSG private during the past few years. He’s said to have recently hired investment banks Jefferies Group LLC and Canaccord Genuity to explore a possible bid for PSG, according to Reuters. PSG was owned for about a decade by U.S. sporting goods company Nike Inc. before being sold to private equity firm Kohlberg & Co in 2008. It went public on the Toronto Stock Exchange in 2011. PSG, formerly known as Nike Bauer from 2005 to 2009, and subsequently Bauer Performance Sports Ltd., changed its name to Performance Sports Group in June 2014 as it was listed on the New York Stock Exchange. Founded in Kitchener, Ontario, Canada in 1927 as the Bauer company by the Freibauer family, owners of Western Shoe Company, PSG’s predecessor developed the first skate with a blade attached to the boot, an innovation credited with changing the game of hockey. POWER CORPORATION HISTORY POW_History POWER CORPORATION SNAPSHOT Power-Corp-Of-Canada_Snapshot_9-4-16 Infographics, courtesy Power Corporation of Canada. Photo (above): Paul Desmarais III, Chairman of Sagard Capital Partners. (La Presse/Edouard Plante-Fréchette)]]>

Syck Amore: Landlords $SPG, $GGP JV to Take Over @Aéropostale for $243M

Syck Amore: Landlords $SPG, $GGP JV to Take Over @Aéropostale for $243M

The Wall Street Journal, and is subject to court approval. The move comes two weeks after rival Los Angeles-based teen clothing retailer American Apparel LLC (AA), one of the largest apparel manufacturers in North America, reportedly hired investment bank Houlihan Lockey to explore a sale of the company, which was founded in 1989 by its controversial former chairman and CEO Dov Charney. In February 2016, American Apparel itself exited bankruptcy and is now privately owned by its creditors under a financial restructuring plan whereby the company converted $230 million in a debt-for-equity swap. AA’s new owners include Standard General, Monarch Alternative Capital, Coliseum Capital, and Goldman Sachs Asset Management. Two years ago, Aéro tied the knot for a $150 million senior secured credit facility with New York private equity firm Sycamore Partners, in conjunction with a sourcing arrangement with Sycamore’s portfolio company MGF Sourcing. However, the deal with Sycamore came back to haunt Aéro. On May 4, 2016, Aéropostale took the next steps in its ongoing business transformation saga by filing voluntary Chapter 11 bankruptcy petitions, closing 113 U.S. locations and all of its 41 stores in Canada. Aéropostale, headquartered in New York City, has about 800 stores in the U.S. and Puerto Rico, and through licensing arrangements around the world, but its footprint is expected to still be reduced drastically. The first Aéropostale store was opened in 1987 by Macy’s in the Westside Pavilion Mall in Los Angeles. The store was the brainchild of R.H. Macy Co. Aéro posted 13 straight quarterly losses and reported a net loss for fiscal 2015 of $136.9 million, which are provoking severe liquidity constraints. The company also indicated that it failed to resolve a vendor dispute with MGF, which “is causing a disruption in the supply of some merchandise.” “Under normal conditions, we would be very optimistic about our potential for financial growth throughout the first half of 2016,” said Aéropostale’s CEO Julian Geiger earlier this year. “Regrettably, our short-term visibility is limited by our current vendor dispute.” Sycamore, with more than $3.5 billion in capital under management, specializes in retail and consumer investments. The firm’s portfolio includes Talbots, Stuart Weitzman, Nine West, Kurt Geiger, Coldwater Creek, Belk, Dollar Express, Hot Topic, and others. Sycamore was founded in 2011 by Stefan Kaluzny and Peter Morrow, who previously worked at San Francisco private equity firm Golden Gate Capital. Given Sycamore’s aggressive retail shopping spree, The New York Times once referred to the pair as, “no retail parvenus.” Although Aéropostale continues to struggle with falling sales, its rivals such as American Eagle Outfitters Inc (NYSE: AEO) and Abercrombie & Fitch Co (NYSE: ANF) have managed to turn around their businesses by controlling inventories and responding faster to changing fashion trends.]]>

Distressed $PSG Performance Sports Group Hires Centerview to Explore Exit

Distressed $PSG Performance Sports Group Hires Centerview to Explore Exit

New Hampshire Business Review. Exeter, New Hampshire-based PSG is a leading developer and manufacturer of high performance sports equipment and apparel. It is the global leader in hockey with the strongest and most recognized brand, and a leader in North America in baseball and softball. PSG’s products are marketed under the Bauer, Mission, Maverik, Cascade, Inaria, Combat and Easton brand names and are distributed throughout the world. The company, which has experienced multiple leadership changes in recent years, is said to be conducting an internal investigation for undisclosed reasons. PSG is the subject of investigations by the SEC and Canadian authorities, and is a defendant in a consolidated class action suit in New York, according to NHBR. The plaintiffs reportedly allege that PSG pressured retailers into ordering merchandise to artificially inflate revenue and mislead investors. In June 2016, the company appointed Harlan Kent as its new chief executive and as a member of its board of directors. Kent is the former president and CEO of Yankee Candle Inc. In January 2016, PSG acquired the Easton Hockey business of Easton Hockey Holdings Inc. from New York-based private equity firm Chartwell Investments, which had previously acquired Easton in 2014 from BRG Sports, reportedly for roughly $20 million with little or no money down. Around the same time, PSG’s former chairman, Graeme Roustan, who left the company’s board in 2012, filed a lawsuit in Canada against accounting firm Grant Thornton for breach of contract and defamation in connection with a battle over the retailer’s strategy. Roustan, who as of December 2015 held a 1.39% stake in PSG, had been seeking to take PSG private during the past few years. He’s said to have recently hired investment banks Jefferies Group LLC and Canaccord Genuity to explore a possible bid for PSG, according to Reuters. PSG was owned for about a decade by U.S. sporting goods company Nike Inc. before being sold to private equity firm Kohlberg & Co in 2008. It went public on the Toronto Stock Exchange in 2011. PSG, formerly known as Nike Bauer from 2005 to 2009, and subsequently Bauer Performance Sports Ltd., changed its name to Performance Sports Group in June 2014 as it was listed on the New York Stock Exchange. Founded in Kitchener, Ontario, in 1927 as the Bauer company by the Freibauer family, owners of Western Shoe Company, PSG’s predecessor developed the first skate with a blade attached to the boot, an innovation credited with changing the game of hockey.]]>

Montreal's Gildan to Acquire Bankrupt Teenage Fashion Icon American Apparel for $66M

American Apparel New Owners Exploring Exit, Hire Houlihan Lockey

Reorg Research. In addition, “The 27-year-old teen retailer, which boasts on its Web site that its togs are ‘Designed, Cut and Sewn in Los Angeles,’ is making plans to pull up stakes and move east — possibly to North Carolina or Tennessee, where the minimum wage is $7.25,” the New York Post reported. American Apparel’s manufacturing is based in a seven-story 800,000-square-foot factory in downtown Los Angeles, where it produces more than 55,000 different products and garments. The company also owns and operates its own fabric dye house, garment dye house, and knitting facility, all based in Los Angeles. According to The New York Times, in 2006 American apparel was “the single largest garment factory in the United States.” The erstwhile fashion empire went “from being the coolest company on the block when it arrived in Britain in 2004,” according to The Guardian, which named American Apparel “label of the year” in 2008, to chapter 11 bankruptcy in October 2015, due to ongoing losses. “The label’s progressive labour standards and high voltage ads made it notorious – from dorm room project to generation-defining brand,” says Dazed writer Julie Zerbo. “After settling in Los Angeles in 1997, Charney began to make waves, challenging the labour standards of the local garment industry by paying higher wages (two times higher than the standard wage at times).” “American Apparel had a very precise identity to uphold: attainable aspiration – those hot, ‘real’ twenty-somethings that appeared in their images,” she added. “They took on larger competitors, such as The Gap, by catering to those experiencing logo fatigue. From early on, Charney eschewed logos – like the brand names his rivals were slapping on most of their t-shirts and sweatshirts.” In December 2014, Charney was forced out after an investigation for misuse of company funds and inappropriate conduct with employees. In January 2016, American Apparel rejected a bid reportedly valued at $300 million from Charney’s backers, Atlanta, Georgia-based family office and independent venture capital investor Hagan Capital Group, and Dallas, Texas-based early-stage venture capital investor Silver Creek Ventures. In February 2016, American Apparel exited bankruptcy and is now privately owned by its creditors under a financial restructuring plan whereby the company converted $230 million in a debt-for-equity swap. The company’s new owners include Standard General, Monarch Alternative Capital, Coliseum Capital, and Goldman Sachs Asset Management. The investor group also reportedly arranged a $40 million loan to help it exit bankruptcy, and injected another $40 million in new debt and equity. The holdings of former American Apparel shareholders, including Charney, became worthless. In February, Charney was said to be starting from the bottom again on a venture that sounds exactly like American Apparel, according to WWD. The new project is backed by Chad Hagan, president of Hagan Capital Group, who backed Charney’s bid to reclaim American Apparel. Hagan reportedly said the new company will make basics for men and women, will manufacture everything in the US, and will focus on wholesale in the early stages. “Sound familiar?” asks racked contributor Cameron Wolf. [caption id="attachment_433333" align="aligncenter" width="1024"]dov_charney Dov Charney, Founder and former Chairman & CEO of American Apparel.[/caption] “What’s important to us now is we’re able to form this new venture and put Dov at the helm and we’re going to do basics again,” Hagan told WWD. “We don’t want to just start with some funny, online brand. We’re going to do what Dov does best and then establish a robust e-commerce system.” “We hope to create a brand that captures the attention of the world. It will be irreverent and authentic.” Charney revealed on PBS during a recent interview with Tavis Smiley about his upcoming entrepreneurial ventures in downtown Los Angeles. “Whatever the past is, it is. I’m moving forward and I’m going to build a world-class company right here in Los Angeles,” the 47-year-old Canadian-born artist and industrialist said. “Long known for edgy, sexually charged advertising and store displays, the company lost its grip on the hottest fashion trends and basic retailing strategy, with stores selling the same goods year-round and factories churning out swimsuits in September,” according to USA Today. Paula Schneider, the new CEO, “has outlined a strategic path to rehab the company’s image through a mix of new marketing, products and store design,” it added. Schneider is an advisor on private equity acquisitions, brand strategies, operations and growth, through her firm Paula Schneider Consulting, since 2013. She’s an experienced senior executive in the apparel/fashion sector, who previously served as CEO and director at Big Strike LLC, a portfolio company of The Gores Group. She’s a former director at J. Mendel, as well as president of Warnaco Swimwear Group and BCBG Max Azria, among others. To understand why American Apparel has declined so spectacularly, take a stroll through Cambridge, Mass. by the Harvard campus, and you’ll notice that, “the store design is exactly as it was 10 years ago,” said racked contributor Elizabeth Segran. “It’s reminiscent of a factory, with stark white walls covered in metal racks and harsh overhead lighting. On the walls are enormous posters that capture the 1970s porn aesthetic: a woman in a sheer triangle bra suggestively stares at the camera on her hands and knees, a woman clad in nothing but legwarmers and panties looks more demure.” “American Apparel’s risqué marketing suggested a raw, empowered sexuality when it first entered the scene. Now it’s inseparable from the troubling exploits of company founder Dov Charney, who was ousted (in 2014) after the board compiled a long list of strikes like sleeping with employees, walking around the factory naked, and masturbating in front of a journalist,” she added. “Another reason these stores are doing so poorly? What was once considered “hipster style” has gone completely mainstream.”]]>