Denim firm True Religion tries company sale on for size.True Religion Apparel Inc. has secured Goldman Sachs The Goldman Sachs Group, Inc., or simply Goldman Sachs (NYSE: GS) is one of the world's largest global investment banks. Goldman Sachs was founded in 1869, and is headquartered in the Lower Manhattan area of New York City at 85 Broad Street. & Co. to advise the L.A.-based denim company on a possible sale, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. investment banking sources and a report in Women's Wear Daily Women's Wear Daily (WWD) is a fashion-industry trade journal sometimes called "the bible of fashion."[1][2] It is the flagship journal of Fairchild Publications, Inc.[3] WWD's publisher is Ralph Erardy, Sr. . The move comes after Charles Lesser, True Religion's chief financial officer, disclosed that the company would be interested in a deal with a private equity firm. But strategic buyers looking to expand their portfolio of brands could be among other probable candidates vying to take over True Religion. Both strategic buyers and private equity firms have been active in the L.A. area apparel market. Private equity firms snapped up local jeans brands Seven for All Mankind 7 For All Mankind (often referred to simply as Seven or Seven Jeans) is a California-based designer jeans company founded by Michael Glasser, Peter Koral, and Jerome Dahan in 2000. The company is headquartered in Vernon, California. LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control and Citizens of Humanity Citizens of Humanity is a designer denim manufacturer based in Huntington Park, California, that was founded by the makers of 7 For All Mankind. A portion of all [Citizens of Humanity] sales are donated to Conservation International [Citizens of Humanity at Jeans.com [1]]. within the last two years. Strategic buyers who've transformed L.A. brands into powerhouses include Liz Claiborne Inc., which pumped up local track suit specialist Juicy Couture into a large fashion supplier. The trick for True Religion now is to come up with a suitable asking price. Analysts have said that the company, trading recently at a lofty two-and-a-half to three times its revenues, could be overvalued Overvalued A stock whose current price is not justified by the earnings outlook or price/earnings (P/E) ratio and thus, expected to drop in price. Overvaluation may result from an emotional buying spurt, which inflates the market price of the stock or from a deterioration in a in the marketplace, where many acquisitions have been lower priced. Although the sticker price wasn't disclosed, industry sources estimate that Bear Steams Merchant Banking bought a stake in Seven for 1.4 times revenues. Evaluating True Religion has its challenges: The expansion potential of True Religion's retail operations, currently limited to one store in Manhattan Beach, is a crucial consideration. Another issue is whether True Religion can effectively grow its product mix from its denim base. The feverish competition in the premium denim sector, still a tiny sliver of the overall jeans market, has raised speculation about a shakeout that might endanger companies hawking expensive jeans as retailers thin out the number of brands they carry. Still, True Religion's sales continue to rise. For the quarter ended March 31, the company racked up nearly $36 million in revenues, up from $25.5 million for the like period a year earlier. Its profits were up a whopping 71 percent over the same period, to $6.5 million. |
|
||||||||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion