As of Thursday, June 30, 2016
VF Corp. is selling two of its top contemporary brands to Delta Galil, an Israeli apparel manufacturer that is more than 40 years old.
Delta Galil said it signed a definitive agreement to buy 7 For All Mankind and Splendid/Ella Moss for $120 million. The acquisition is expected to add $300 million to Delta Galil’s annual sales in 2017. The deal should close in the third quarter of this year.
Splendid/Ella Moss and 7 For All Mankind will join Delta Galil’s other brands such as P.J. Salvage, Schiesser, KN Karen Neuberger, Nearly Nude, LittleMissMatched and FIX.
Issac Dabah, Delta Galil’s chief executive, said he was able to buy the company at a bargain because profits at the brands have declined over the last few years.
He is hoping to close some of the brands’ unprofitable stores and grow the labels. “We will continue to do what they have done until now,” he said in a telephone conversation from Switzerland. “We have some plans in place for growing the brands, but it is too soon to unveil our total strategy.”
For years, 7 For All Mankind has been manufactured in Los Angeles and Mexico. Dabah said he plans to continue with that production plan. The same goes for Splendid/Ella Moss, which does much of its production in LA.
Delta Galil’s chief executive said he was attracted to the brands because they appeal to a millennial customer and are premium brands known for their quality. “The last two years, business for the brands declined, but the good news is that the denim business has improved in the last year,” he said. “We feel this was a terrific acquisition.”
Last year, Delta Galil acquired P.J. Salvage, a lingerie and intimate wear company headquartered in Irvine, Calif., and has plans to expand the collection beyond womenswear to children and men. Delta Galil, with revenues of more than $1 billion a year, likes to find modern brands and figure out how to grow them, Dabah said.
VF Corp., based in Greensboro, N.C., bought Los Angeles–based 7 For All Mankind in 2007 for $775 million. VF already owned a one-third stake in Mo Industries, the parent company of Splendid and Ella Moss. In 2009, VF acquired the other two-thirds for $161 million plus $47 million in debt.
7 For All Mankind was started in Los Angeles in 2000 by Peter Koral, Jerome Dahan and Michael Glasser during the height of the premium-denim boom.
Mo Industries was founded by Moise Emquies, who was a lawyer by day and a designer by night.