Delta Galil Industries, Ltd. (DELT/Tel Aviv Stock Exchange, DELTY.PK/OTCQX), a leading Israeli manufacturer and marketer of branded and private label apparel products for men, women and children, announced in late August that it has completed its previously announced acquisition of contemporary premium brands.
The brands the Israeli apparel group bought from luxury conglomerate VF Corporation (NYSE:VFC), are 7 For All Mankind®, Splendid® and Ella Moss®.
As analysts at Zacks highlighted on a research note on Monday, the brands sold to Delta Galil were “underperforming” businesses that changed hands at 120 million dollars
“The company’s intent behind offloading this business is to continue with its active portfolio management strategy, wherein it constantly reviews its brands' portfolio and retains the best performing ones while discarding the ones that are troubled. The company recently shifted its focus to the composition of its brands' portfolio with the aim of maximising its growth and shareholders' returns,” sums up Zacks analysis team.
The research firm also stresses that “While the brands, mentioned above, hold significant potential for growth, the company’s Contemporary Brands segment has lately been facing challenges due to declining demand for casual and basic apparel.”
The segment reported a 14 percent drop in revenue to 344 million dollars in 2015 and represented a 2.8 percent of the company’s total revenue.