Polo Ralph Lauren buys back its jeans license

Polo Ralph Lauren on Monday said it agreed to buy back its U.S. Polo Jeans business from Jones Apparel Group Inc. for $355 million, as part of a strategy to take direct control of its brands. "We already have a strong denim business in Asia and Europe, and with direct ownership of the Polo Jeans business in the United States we will continue to invest in design and infrastructure to leverage our global jeans and denim capabilities," Roger Farah, president and chief operating officer, said in a statement.

Shares of Polo closed up 1.4% at $53.73, after hitting a session high of $54.31 on the New York Stock Exchange, Jones shares closed up fractionally at $30.89. Polo, known for its iconic shirts decorated with a polo-player logo, has found recent success by focusing on its luxury brands, which have performed well despite weakness in department stores. The company also sells some brands at mid-priced and discount retailers.

Polo's brands include Polo by Ralph Lauren, Ralph Lauren Purple Label, Black Label, Blue Label, RRL, RLX, Chaps, and Club Monaco . In a separate statement, Jones Apparel said the Polo Jeans license imposed certain operating restrictions on the company, including the sale of certain competing products. Jones said the 2005 revenues for Polo Jeans Co. were about $300 million, and the business contributed about $42 million of pre-tax profit in 2005. The transaction is expected to close in early February.