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Blue-Headgear JV encompasses all aspects of business

10
Nov '08
Blue Holdings Inc announced that effective October 31, 2008, it has entered into a joint venture (JV) agreement, with Headgear, Inc, a leading fashion designer and manufacturer with wholesale sales in excess of $100 million. The new entity, Blue Holdings Headgear JV LLC (BHH), will market, sell and distribute the Taverniti So, Yanuk, and Antik Denim apparel brands within the United States.

BHH will initially market Blue Holdings' products to all of the current customers of Blue Holdings and Headgear. Headgear will also develop non-denim products for distribution by BHH, such as t-shirts, hoodies and footwear, under the Taverniti So, Yanuk, and Antik Denim brands. Blue Holdings will continue to source the denim products for its various brands, and will sell those products to BHH for distribution to US retailers. The new formed joint venture also has the right to enter license agreements for merchandise under the aforementioned brands for sale in the U.S. Any license fees would be split equally between Blue Holdings and Headgear.

Under the terms of the agreement, BHH will be financed by Headgear Inc, with Blue Holdings and Headgear each owning 50% of the newly formed entity. Headgear will advance Blue Holdings $1.25 million over the course of four months to be used as working capital. The advance will be repaid out of Blue Holding's portion of BHH's operating profits. Headgear will also finance all the production of product purchased by the BHH.

Founded in 1992, Headgear Sportswear is today a wholesale designer and marketer of young men's and junior's apparel in the U.S., with a portfolio of brands such as Blac Label, Blac Label Pink, Blac Label Gunmetal and Tru Ambition footwear. Headgear's brands are sold through multiple retail channels.

“We are very excited to execute on this broad-based partnership with Headgear, which has re-energized our company during a difficult economic climate,” said Glenn Palmer, Chief Executive Officer of Blue Holdings, Inc. “By combining our respective core competencies and creative vision, we will enhance and strengthen the product offerings under the Antik, Yanuk, and Taverniti brands as well as broadening their base of distribution. The partnership of these two companies has tremendous synergies and we look forward to a long and successful relationship.”

Jeff Watson, Chief Executive Officer of Headgear Inc, stated, “We are looking forward to teaming with Blue Holdings and providing the expertise that has enabled us to continue to grow our house of brands profitably in a difficult retail landscape. The brand equity of Antik, Taverniti So and Yanuk speak for themselves and we feel that working closely with Blue Holdings, we can fully round out the collections and offer complete lifestyle brands.”

Blue Holdings Inc


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