VF Corp. Agrees to Buy Rock & Republic Brand
After several months of back-and-forth negotiations, VF Corp. has agreed to purchase the bankrupt Rock & Republic denim brand, acquiring the company’s trademarks and intellectual-property rights.
An asset-purchase agreement was announced on Dec. 21. Although no purchase price was listed in the announcement, published reports peg the price at $57 million.
The purchase agreement by VF Corp. —the mega-apparel corporation whose other denim labels include 7 For All Mankind, Lee and Wrangler—must be approved by the U.S. bankruptcy judge handling the Chapter 11 petition filed by Rock & Republic in New York on April 1.
The purchase agreement with VF Corp. was struck after a deal between Bluestar Alliance—a New York investor whose labels include Hot Kiss, Liz Lange and the Sharper Image—and Rock & Republic for $33 million to $48 million fell through in mid-December.
The announcement should be good news for Los Angeles apparel executive Richard Koral, whose $15 million loan to Rock & Republic was due on April 2 and forced the company into bankruptcy protection. He is the only secured creditor in the pack of creditors. Rock & Republic’s unsecured creditors are owed more than $15 million.
A hearing on the asset-purchase agreement is scheduled in bankruptcy court on Jan. 19. The deal is expected to close next spring, VF Corp. said.
VF Corp.’s purchase does not include the company’s stores, operations or its headquarters in Culver City, Calif. It was unclear what role Michael Ball, the founder of Rock & Republic, will have, if any, in the new company. Calls to Ball were not returned.
In the announcement, Rock & Republic said it wished to assure its customers that the transition over the next few months should be seamless and that it planned to fulfill its orders.
When the transaction is completed, it will mark the first purchase by VF’s licensed-brand group, which was formed in 2009 and is headed by David Conn.
VF has been eyeing several Los Angeles brands to acquire. Its most notable recent California acquisition was the 2007 purchase of 7 For All Mankind for $775 million. The high-end denim brand, which in 2000 was founded by Peter Koral, brother to Richard Koral, is still headquartered in Los Angeles.
VF’s purchase will make it an interesting competitor in the premium-denim field dominated by Los Angeles designers.
“The Rock & Republic name still has cachet. What VF does with that is another story,” said Michael Glasser, co-owner of Los Angeles denim label Rich & Skinny. He is also founder of the Cj by Cookie Johnson denim label.
“They have Seven. Adding another premium-denim brand into the mix is interesting. Especially as premium denim is not what it was. It’s still a strong category but not in the same way as before. It’ll be interesting.”
Joie Rucker, the other co-owner of Rich & Skinny, said she believes VF’s ownership will tame the Rock & Republic brand, which had a racy past and reputation.
“Whenever a company goes from being a private, personally owned company into a more corporate structure, there will always be some give and take,” she said. “But that’s all right.”—Deborah Belgum and Erin Barajas