U.S. fashion giant Liz Claiborne Inc. said Thursday that it is buying Mexx Canada Inc., the privately owned licensee of Dutch clothier Mexx Group.
Financial details of the deal were not disclosed.
Montreal-based Mexx Canada runs 31 stores and 35 locations within department stores. Last year, it had sales of $83-million, and it expects that figure to rise to $100-million by the end of 2002. Mexx Canada employs about 800 people.
This is Claiborne's second foray into the Mexx line and its first within North America, noted Joseph Nezri, president and chief executive officer of Mexx Canada. Last year, it bought Holland's Mexx Group BV for about 300 million euros ($200-million), including debt.
According to Mike Scarpa, Claiborne's chief financial officer, that European arm is already responsible for designing and manufacturing roughly 80 per cent of Mexx Canada's products, which it then imports. "It was only a natural that we acquire that portion of the brand in Canada," he said during an interview from his office in New York.
Mexx does not operate in the United States.
Claiborne, which designs and markets 26 different brands - including the DKNY and Kenneth Cole lines - had sales last year of $3.4-billion (U.S.). It said it expects the Mexx Canada deal to add as much as 2 cents a share to its 2002 year-end earnings.
But Mr. Nezri said the purchase will not change the company's strategy. Claiborne will keep its management and staff levels intact, and keep all Mexx stores open. (Mexx plans to launch eight new stores in Canada this year.)
What's more, it will not carry any additional Liz Claiborne lines through the stores. Claiborne does not have any stand-alone outlets in this country, but its products are available at the Bay stores.
"We are very pleased that Mexx Canada is joining the Liz Claiborne family," Rattan Chadha, Mexx Group's president and chief executive officer, said in a statement.
"The Mexx Group has enjoyed a profitable long-term relationship with Mexx Canada, and the partnership with Liz will enable Mexx Canada to accelerate the execution of its growth strategy," he added.
Meanwhile, rating agency Standard & Poor's Corp. said Thursday that the deal would have "no impact" on Claiborne's credit ratings or its outlook on the firm.