Private equity firm the Gores Group is paying $85 million to buy the international Mexx business from women’s clothing retailer Liz Claiborne Inc., Reuters reported Friday. Liz Claiborne will retain an 18.75 percent interest in the joint venture with Gores Group, Reuters wrote. Liz Claiborne acquired Mexx in May 2001 for roughly $264 million.
(Reuters) – Women’s clothing maker Liz Claiborne Inc said it would sell its international Mexx business to private equity firm Gores Group for $85 million in a move to focus on its core brands.
Liz Claiborne will also retain an 18.75 percent interest in the joint venture with Gores Group, the company said in a statement. It acquired Mexx in May 2001 for about $264 million, as part of an effort to diversify its portfolio.
The company — which owns Juicy Couture, kate spade, Lucky Brand and Mexx — has sold, licensed, or closed a bunch of underperforming wholesale brands in recent years to switch its attention to brands in its own retail stores.
In July, the company had said it was considering roping in an investor to take a majority interest in its international Mexx business.
The Gores Group will own an 81.25 percent interest in the joint venture. The global Mexx business will continue to be led by Thomas Grote as chief executive, and Lloyd Perlmutter will remain chief of Mexx Canada.
The deal is expected to close in the fourth quarter.
Last month, Liz Claiborne said it would would sell the trademarks on some of its perfumes, including Curve, to Elizabeth Arden Inc in part to lower the size of its debt.
New York-based Liz Claiborne has not reported a profit since 2006.
Shares of the company closed at $5.06 on Thursday on the New York Stock Exchange. (Reporting by Nivedita Bhattacharjee in Bangalore; Editing by Viraj Nair)