Randa Accessories is finally fulfilling its dream to expand into the apparel market now that it has signed a definitive agreement to acquire Haggar Clothing Co.
Terms of the transaction were not disclosed, although Randa said it is funding the deal through a combination of cash on hand and committed financing provided by commercial banks. The deal is expected to close before the end of June, and Randa said combined revenues following completion of the deal will be greater than $1 billion for 2019.
David Katz, Randa’s executive vice president and chief marketing officer, said on Wednesday that the planned acquisition fits the company’s “Moats, Boats and Bridges” strategy. That strategy protects Randa’s core operation, reflects initiatives that are transformational in nature, and moves the company into adjacent businesses.
Of Haggar, Katz said, “It is in adjacent classifications that are in similar markets [to Randa] and similar tier products.
He and Heath Golden, the company’s chief strategy officer, have been looking at how Randa should expand to better grow the overall business. To that end, the accessories firm has made investments in direct-to-consumer brands, such as bespoke tailored clothing brand Knot Standard, custom-made dress shirts firm Stantt and sneaker brand Greats. Those investments have been made through Randa Digital.
While those investments give them a good picture on how the industry and consumer shopping patterns have changed and are still shifting, Randa still sought a transformational deal so it would have a business that relies less on belts, slippers, small leather goods, neckwear and luggage, to name a few of the accessories categories it manufactures via a licensing program. Randa works with nearly 50 brands on accessories products, including Levi’s, Tommy Hilfiger, Columbia Sportswear, Dickies and Kenneth Cole.
Haggar filled that need. Founded in 1926 in Dallas, Haggar grew from its roots as a manufacturer of men’s fine dress pants and slacks to now include sport coats, vests and “custom fit” suits. Haggar also has more than 80 branded stores, a dedicated e-commerce platform and a wholesale component where its merchandise is sold in more than 10,000 stores across North America. It also owns Montreal-based Tribal, a women’s sportswear brand that was founded in 1971. Tribal supplies to more than 2,400 active specialty boutique accounts.
Jeffrey Spiegel, chief executive officer of Randa, said, “The acquisition of Haggar is an important waypoint on our strategic journey.” He added that the deal brings together “two successful, financially strong, and complementary businesses to better serve our retail and brand partners, our associates and our consumers. We believe that brands matter–and Haggar and Tribal are highly relevant brands in their respective markets.”
Michael Stitt, Haggar’s CEO, will continue with the company, as will his team, according to Randa’s Katz in a telephone call. Haggar is based in Dallas.
Stitt said, “Jeff and his extraordinary leadership team add invaluable scale, resources, expertise and marketing, in addition to retail partnerships. They align with our core values and high standards.”
Last year Randa was embroiled in a fight to acquire Perry Ellis International, which eventually was taken private by its founding family led by George Feldenkreis.
One industry source, familiar with the thinking of Randa’s Siegel, said, “Randa has the luxury of being private, large, profitable and patient…. Randa is a successful licensee for a lot of brands. Jeffrey has wanted to own a brand, but it’s hard to find one that doesn’t threaten current licensors and be in a category where he’s comfortable and that also has enough scale to move the needle…. Haggar is a wonderful historic brand [that] does a couple hundred million at global retail. Haggar is a great fit and with Michael Stitt, Randa has a professional partner.”