Delta Galil Industries, a global manufacturer and marketer of branded and private label apparel, said it has signed an agreement to acquire intimates online retailer Bare Necessities.
“This transaction reflects our strategic growth objective to diversify our distribution channels,” Isaac Dabah, chief executive officer of Delta Galil, said Tuesday. “As the digital space currently represents the fastest-growing segment in our industry, we are very pleased to acquire such an authority in online intimates. Bare Necessities can significantly enhance Delta Galil’s presence in the digital world, as we continue to pursue growth online. I look forward to partnering with the senior leadership of Bare Necessities to achieve strong, profitable growth.”
Established in 1998, with headquarters outside New York City, Bare Necessities offers more than 160 brands and 6,400 styles in intimates, women’s swimwear, shapewear, lingerie, sleepwear and hosiery. Known for its expertise in fit and its wide range in sizes, Bare Necessities’ product offering includes Wacoal, Chantelle, Spanx, Calvin Klein and Miraclesuit, with exclusive collections such as Birdsong and Camio Mio.
Following the deal, the site will offer Delta Galil’s own brands, as well. They include seamless apparel such as bras, shapewear and socks; intimate apparel for women, and extensive lines of underwear for men such as Schiesser, Eminence, Athena & Liabel, as well as babywear, activewear, sleepwear and leisurewear.
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Delta Galil also designs, develops, markets and sells branded denim and apparel under the brand 7 For All Mankind, and women’s apparel under the brands Splendid and Ella Moss. In addition, it sells its products under licenses for Wilson, Converse and Tommy Hilfiger.
The transaction is expected to close in the next few weeks and be accretive to earnings next year, Delta Galil said. Walmart had purchased Bare Necessities in October 2018. Last week, Delta Galil reported sales for the second quarter ended June 30 were down 27 percent to $270.9 million.
Delta Galil noted that the disruption caused by Covid-19 and related business closures and public quarantine measures resulted in decreased wholesale volume and lower retail sales due to store closures, which were partially offset by higher web and e-commerce sales. The company reported a 163 percent increase in its own web site sales.
The firm, based in Tel Aviv, Israel, posted a net loss of $53.3 million in the period, including a $39.2 million restructuring charge, compared with net income of $5.1 million in the year-ago quarter.
Many companies that rely on wholesale distribution have made little secret of their desire to better diversify their channel exposure and increase their direct access to consumers. Nike stepped away from Amazon last year, and recently touted a plan to drive more business, as much as 50 percent, through its direct channels. And a UBS analyst warned that many wholesalers can no longer rely on their department-store partners, given the disruption shaking up the retail landscape.