NEW YORK (The Deal) -- Perry Ellis International (PERY), the Miami-based apparel group, is likely being prepped for a sale by the controlling Feldenkreis family, according to two sources familiar with the situation.
Over the past several months, Perry Ellis has inked a number of brand licensing deals as it attempts to clean up the company's balance sheet, a process that will likely continue for the next few months, a source said.
While the Feldenkreis family has an emotional attachment to the business, and has additionally profited from business Perry Ellis has done with related companies owned by the family, it has reconciled itself to the idea that it is nearing the time to sell the business.
The family holds about a 17% stake between George Feldenkreis, who is chairman and CEO, and his son Oscar Feldenkreis, who serves as vice chairman, president and COO. That stake increases to about 20% when stock options are calculated in.
Over the past few years, Perry Ellis has considered selling ancillary, noncore brands. But a source said that doing so is not a workable strategy, as the company would only get a fraction of the price it initially paid for those businesses in some cases.
That would result in a steep asset write-down that would be difficult to manage, particularly as a publicly held company. And it is why the Feldenkreis family has shied away from doing so, the person said.
Likely buyers for the business could include VF (VFC), which has continually voiced an interest in lifestyle brands, particularly those with an active outdoor bent, according to a source. The most attractive part of Perry Ellis is its golf-related lifestyle apparel brands.