American Apparel has announced its first acquisition: New York City based Oak. Oak will operate as a separate division under the guidance of its founders and current top executives. The independent fashion boutique’s total sales are currently at circa 5 million dollars. “I’m excited by this because I saw an opportunity to build Oak without a lot of extra costs. They can leverage our manufacturing capabilities, our POS [point-of-sale] and RFID [radio frequency identification] systems, our warehousing and our freight and distribution,” said American Apparel CEO Dov Charney in an interview with ‘WWD’. “The Oak aesthetic is a very different look and feel than American Apparel, and it’s noncompetitive in price.” Los Angeles–headquartered vertical retailer American Apparel Inc. will acquire prestigious New York boutique retailer Oak, as broken by media reports at the beginning of August. The bold movement has surprised the industry and market alike. Although the price paid by American Apparel has not been revealed, both parties have reportedly showed their content with the deal. While American Apparel’s CEO said that he intends to look to Oak founders Louis Terline and Jeff Madalena for "advice on the American Apparel product,” the indie label said on Twitter that “We’re completely committed to maintaining our brand’s vision and are excited for what the future holds.” Oak’s co-founders Louis Terline and Jeff Madalena will seemingly continue to control Oak and consult American Apparel. American Apparel could help Oak with retail technology, such as RFID, of which the basics company has been one of the most enthusiastic adopters. American Apparel acquires Oak indie fashion label: American Apparel’s stock slightly plunged, 2 cents per share, to 1.99 dollars at the market close the day news broke of the Oak sale. The news was a surprise to many as American Apparel has been facing serious financial struggles, weighted by a significant debt, which has put it in the red since 2009. Nevertheless, it seems that the apparel retailer – much known because its controversial advertising campaigns, has lately reported improved same-store sales for June 2013 (+ 7 percent on a YoY basis.) In July, Dov Charney, chairman and chief executive officer of American Apparel, said June was American Apparel’s 25th straight month of positive same-store growth. Terms of American Apparel’s deal with Oak were not disclosed, but Charney said that the sum paid was not big enough to warrant reporting to the Securities and Exchange Commission, as trade media reported Friday. “American Apparel’s theme has been going after this older, urban hipster,” King said. “This New York boutique fits the bill for them,” said Dave King, CFA, a senior research analyst for Roth Capital Partners in Newport Beach, Calif. Source: Fashion United
Monday, 31 March 2014
American Apparel buys NYC-based Oak at undisclosed sum
American Apparel has announced its first acquisition: New York City based Oak. Oak will operate as a separate division under the guidance of its founders and current top executives. The independent fashion boutique’s total sales are currently at circa 5 million dollars. “I’m excited by this because I saw an opportunity to build Oak without a lot of extra costs. They can leverage our manufacturing capabilities, our POS [point-of-sale] and RFID [radio frequency identification] systems, our warehousing and our freight and distribution,” said American Apparel CEO Dov Charney in an interview with ‘WWD’. “The Oak aesthetic is a very different look and feel than American Apparel, and it’s noncompetitive in price.” Los Angeles–headquartered vertical retailer American Apparel Inc. will acquire prestigious New York boutique retailer Oak, as broken by media reports at the beginning of August. The bold movement has surprised the industry and market alike. Although the price paid by American Apparel has not been revealed, both parties have reportedly showed their content with the deal. While American Apparel’s CEO said that he intends to look to Oak founders Louis Terline and Jeff Madalena for "advice on the American Apparel product,” the indie label said on Twitter that “We’re completely committed to maintaining our brand’s vision and are excited for what the future holds.” Oak’s co-founders Louis Terline and Jeff Madalena will seemingly continue to control Oak and consult American Apparel. American Apparel could help Oak with retail technology, such as RFID, of which the basics company has been one of the most enthusiastic adopters. American Apparel acquires Oak indie fashion label: American Apparel’s stock slightly plunged, 2 cents per share, to 1.99 dollars at the market close the day news broke of the Oak sale. The news was a surprise to many as American Apparel has been facing serious financial struggles, weighted by a significant debt, which has put it in the red since 2009. Nevertheless, it seems that the apparel retailer – much known because its controversial advertising campaigns, has lately reported improved same-store sales for June 2013 (+ 7 percent on a YoY basis.) In July, Dov Charney, chairman and chief executive officer of American Apparel, said June was American Apparel’s 25th straight month of positive same-store growth. Terms of American Apparel’s deal with Oak were not disclosed, but Charney said that the sum paid was not big enough to warrant reporting to the Securities and Exchange Commission, as trade media reported Friday. “American Apparel’s theme has been going after this older, urban hipster,” King said. “This New York boutique fits the bill for them,” said Dave King, CFA, a senior research analyst for Roth Capital Partners in Newport Beach, Calif. Source: Fashion United