LF USA to acquire Hampshire Designers business
Hampshire Group Limited announced a significant shift in the Company's growth strategy pursuant to which it will focus on leveraging Hampshire's operating platform in the men's business and actively pursue other strategic opportunities. In connection with this new strategic direction, the Company announced it has sold a portion of its women's businesses to LF USA, a subsidiary of Hong Kong-headquartered multinational Li & Fung Limited, and entered into a definitive agreement to sell the remainder to KBL Group International Ltd.
As part of the agreements, LF USA has acquired the Company's Hampshire Designers business which includes Designers Originals, Mercer Street Studio and Hampshire Studio. KBL Group has agreed to acquire the Company's Item Eyes business, whose brands include Requirements and RQT. For additional information, please refer to the Company's 8-K filed in connection with the announcement.
"This marks an important new chapter in Hampshire's evolution and we remain steadfast in our commient to achieve profitability and build long-term value for our shareholders,” said Heath Golden, CEO of Hampshire Group. "While our women's businesses have been an important part of our organization and we will truly miss the many talented employees who have departed us in connection with these transactions, we have seen a significant shift in our customer's focus toward their own private label and exclusive brands. This shift led us to conclude that this is the appropriate time to more sharply focus our energy and resources on other opportunities. By strengthening an already strong balance sheet, these transactions provide us with a solid base from which to grow and continue on our pathway to profitability.”
Over the past year, Hampshire announced several initiatives to build on and around the foundation in its men's business. In the second quarter of 2010, the Company acquired scott james, a men's specialty retailer and wholesale provider. In October 2010, the Company appointed menswear industry veteran Eric Prengel as President of the division overseeing the growth and direction of the Company's owned and licensed menswear brands including scott james, Geoffrey Beene, Dockers and JOE Joseph Abboud.
Richard Mandell, Chairman of Hampshire's Board of Directors, said, “The Board of Directors is focused on building value for our shareholders. To that end, it is our belief that the company will be better served by divesting our women's brands. We will continue to evaluate strategic opportunities for our business that make the best use of our capital and dedicated employees.”
Marketing Management Group, Inc. (MMG) served as financial advisor and Willkie Farr & Gallagher LLP served as legal advisor to Hampshire in connection with the transactions.
Hampshire Group Limited