PVH Corp. announced Thursday the sign off a definitive agreementto sell substantially all of the assets of its G.H. Bass & Co. division to G-III Apparel Group, Ltd. for approximately 50 million dollars in cash.
The transaction is expected to close in the beginning of the fiscal fourth quarter 2013 and is subject to certain post-closing adjustments and customary closing conditions.
PVH expects the transaction to be approximately 0.05 dollars dilutive to its 2013 non-GAAP earnings per share and approximately 0.15 dollars dilutive to its non-GAAP earnings per share on a full year basis.
As a result of the sale, PVH now expects to incur a pre-tax loss of approximately 20 million dollars yet plans to use the net proceeds received from the transaction to make additional debt prepayments in 2013.
"G.H. Bass & Co. has been a positive and important contributor to PVH's success since we acquired the business in 1987. However, our core competencies today lie in our lifestyle apparel businesses and we see the future of PVH focused around the global growth of our designer lifestyle brands, led by Calvin Klein and Tommy Hilfiger," said Emanuel Chirico, PVH's Chairman and CEO.
"We believe this transaction reinforces our strategy of driving growth through our higher margin businesses, while minimizing earnings volatility and enhancing stockholder value," he added.
On the acquisition, Morris Goldfarb, Chairman, President and CEO of G-III said that "We are delighted by the prospect of adding such a strong heritage brand to our portfolio. We are confident that the addition of approximately 160 G.H. Bass & Co. outlet stores will integrate well into our retail platform and provides us with a powerful opportunity to continue to grow and diversify our business. The transaction is expected to be approximately 0.10 dollars dilutive to fully diluted net income per share for our fiscal year ending January 31, 2014."