Plus   Neg

Gap To Buy Privately Held Luxury Retailer Intermix For $130 Mln: WSJ Reports

Fashion retailer Gap Inc. (GPS) is acquiring privately held women's fashion boutique Intermix Inc. for $130 million as it plans to enter the all-important luxury market, the Wall Street Journal reported Wednesday.

Intermix only has around 30 stores in the U.S. and Canada, and doesn't produce its own clothes. But, Gap expects to benefit from the chain's relationships with designers, including Herve Leger, Yves Saint Laurent and Rag & Bone, the report noted. Intermix has sales of around $130 million a year.

As per the report, Intermix's private-equity owner, Goode Partners LLC, put its 40% stake in the retailer up for sale in October, following which the company's investment bankers started negotiations with Gap.

Art Peck, president in charge of new brands at Gap, reportedly said that Gap plans to double Intermix's store count following the acquisition, then look for opportunities to expand the chain overseas.

Gap, parent of the Gap, Old Navy and Banana Republic brands, is testing out new brands and trying to expand overseas, mainly into markets in Europe and Asia, even though it is closing 20% of its North American namesake stores.

Intermix founder and CEO Khajak Keledjian, who will remain at the company as chief creative officer, stated, "We are the incubator with emerging brands, and we can help them out with collaborations."

The latest deal is Gap's first since it paid $150 million in 2008 for women's active apparel retailer Athleta. In 2006, the company started Piperlime, an e-commerce site that sells other brands such as Elizabeth and James and Trina Turk.

In November, the company once again raised its full year earnings outlook after reporting a 60 percent jump in third quarter profit helped by higher sales and improved margins.

Gap closed Wednesday's trading session at $31.37, up $0.33 or 1.06 percent. In the after hours trading, shares dropped 0.70 percent.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

Business News

Editors Pick
Galaxy Entertainment Group (WYNN) Friday announced that it has agreed to purchase 5.3 million primary shares of Wynn Resorts Ltd. at a price of $175 a share, resulting in $927.50 million of gross proceeds to Wynn Resorts. The two sale, combined with a previous sale effectively eliminate ownership of founder and former CEO Steve Wynn in Wynn Resorts. Starbucks wants to be more efficient but it is risking the fragile loyalty of its most devoted customers. The ubiquitous chain plans a major push to get coffee lovers to use its mobile app to place their orders, but regulars prefer to buy their lattes by waiting in the queue. According to reports,... Taco Bell, the Mexican fast-food chain owned by Yum Brands Inc. (YUM), Thursday said it will start selling tortilla chips in grocery and convenience stores starting May. The chips will be available in Fire and Mild sauce packet flavors and also in a Classic flavor. "This launch of our first line...
comments powered by Disqus
Follow RTT