Tarrant Expands Joint Venture With Azteca
The Guez family, which owns two of Southern California’s largest private label denim manufacturing companies, is consolidating a portion of their operations.
Tarrant Apparel Group, a publicly held company founded in the mid-1980s by company chairman Gerard Guez, announced that it intends to expand its existing joint venture with Commerce, Calif.-based Azteca Production International, a privately held company owned by Gerard Guez’s brothers, Hubert and Paul Guez.
The companies formed a joint venture last year called United Apparel Venture LLC (UAV) in order to reduce production costs of shared customer Tommy Hilfiger. Now they hope to do the same with the Express division of Limited Brands, Inc.
Tarrant chief executive officer Eddy Yuen said, “We are pleased to be expanding this mutually beneficial joint venture with our partner, Azteca Production International, because we both do business with [the same clients] and we feel that the opportunity exists to improve our efficiency, add more value for the customer and, subsequently, increase our business.”
UAV is owned 50.1 percent by Tag Mex, Inc., a wholly owned subsidiary of Tarrant Apparel, which counts Wal-Mart and Mervyn’s as clients and recently acquired a fully vertical twill factory in Mexico. Azteca, which has a 49.9 percent stake in UAV, produces branded labels Joe’s Jeans, Bongo and Hippie Jeans as well as private label apparel for Calvin Klein and American Eagle.
Both companies have reported continual growth (Tarrant’s earnings were $330 million in 2001), leading many industry sources to speculate that the two denim manufacturers might merge for good.
“This is the best way to consolidate our business right now,” said Paul Guez. “We would like to merge fully, but it’s not easy. There are differences in both companies that we are looking at more closely, and slowly but surely trying to put them together,” he added.
