Designer Sells Joe's Jeans

For several years now, Innovo Group Inc. has been making Joe’s Jeans, its top denim label, under a licensing agreement.

Now Innovo, based in Commerce, Calif., is buying the brand from the label’s designer, Joe Dahan.

Innovo announced on Feb. 7 it had entered into a merger agreement with JD Holdings Inc., owned by Dahan, to acquire all rights, titles and interests in the brand. Innovo will issue 14 million shares of its common stock, trading recently at about $1.13 a share, and pay $300,000 in cash when the deal closes. Dahan will stay on as creative director of the brand. Joe’s Jeans is the predominant label Innovo currently produces. Joe’s Jeans accounted for about 97 percent of the company’s 2006 annual revenues, which were $46.6 million for the year ending Nov. 25. Marc Crossman, Innovo’s president and chief executive officer, said the acquisition will help the company to transform itself from a lower-margin, private-label manufacturer and brand licensee into a lifestyle-brand owner. Owning the label helps Innovo expand its efforts to license the name in several areas such as activewear, shoes and tops. “We are going to be very aggressively trying to do more licensing deals in the next 12 months,” Crossman said.

As part of that, Innovo announced it had entered into a licensing agreement with The Betesh Group, a family-owned New York company, to produce and sell handbags and small leather goods, such as belts and wallets, under the Joe’s and Joe’s Jeans brands.

Deborah Belgum