This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
$1 buys you full access to ALL of TheStreet's Subscription Services! Learn More

The Deal: Men's Wearhouse Gains on Abboud Acquisition

Stocks in this article: MW

NEW YORK ( TheDeal) Private equity firm J.W. Childs Associates LP exited portfolio company JA Holding Inc. in a sale to Men's Wearhouse (MW) for $97.5 million, the retailer announced Thursday, July 18.

The Boston private-equity firm, which acquired the fashion company for $73 million in March 2004, earned ''approximately 2 times'' in its equity investment in the sale, according to J.W. Childs partner Adam Suttin. J.W.

Men's Wearhouse shares gained 0.5% to close on Thursday at $39.15.

Childs had acquired the company from Italian publisher RCS MediaGroup. New York-based JA Holding is the parent company of clothing brand Joseph Abboud. Its other brand names include Joseph Abboud, JOE Joseph Abboud, Joseph Abboud BOYS and Joseph Abboud Home.

Menswear designer Joseph Abboud, the founder and creator of the brand, has served as chief creative director of Men's Wearhouse since December 2012.

The transaction includes ownership of JA Holding's U.S. tailored clothing factory in New Bedford, Mass., that employs 450 people. The deal is expected to close in the third quarter of 2013.

Men's Wearhouse had $155 million in cash and no debt as of May 4, according to regulatory filings meaning paying for JA Holding would hardly put a dent in the company's balance sheet.

Men's Wearhouse president and CEO Doug Ewert said in a statement that he expects the addition of the Joseph Abboud exclusive brand to enhance margins and profitability and become accretive to earnings in fiscal year 2014. J.W. Childs had attempted to sell the company before striking a deal with Men's Wearhouse, according to sources. Suttin confirmed that the firm "had other conversations" with potential suitors, but declined to reveal who those other suitors were.

Since it put JA Holding on the block since early 2011, bidders have come knocking but not at quite the right price. Among the rumored potential buyers that had looked at JA Holding were Chicago's HMX Group, which was said to have offered $90 million, and Iconix Brand Group, which had been close to a done deal, according to Women's Wear Daily, also at about $90 million.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,814.94 -2.96 -0.02%
S&P 500 2,067.03 -2.38 -0.12%
NASDAQ 4,758.2520 +3.36 0.07%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs