Candie's, Inc. today announced a long term strategic alliance with TKO Apparel Inc. (together with its subsidiaries and affiliates, “TKO”), a Miami-based apparel company that specializes in the manufacturing of private label bottoms for national brands including Levi's, Calvin Klein, Phillips Van Heusen and Perry Ellis.
Under the terms of the agreements, TKO will purchase Candie's wholly owned jeanswear subsidiary, Unzipped Apparel LLC (“Unzipped”), on or before February 1, 2005. The purchase price will be based upon the tangible net worth of Unzipped at closing.
Candie's and TKO have also entered into a long term licensing agreement, which will commence in August 2004, pursuant to which TKO, through Unzipped, will design, manufacture and sell BONGO® jeans throughout the United States. TKO will also purchase 1,000,000 shares of Candie's stock for $2.2 million.
Commenting on the agreements, Neil Cole, Chairman and CEO of Candie's stated, “The strategic alliance with TKO is significant as it completes our transformation from an operating company to a brand management company, while building on the success of Unzipped with BONGO jeans. TKO brings a wealth of design and sourcing expertise, which we believe will permit BONGO to continue to expand its market share with the fashionable, high quality product that our customers expect.”
James Tate, CEO of TKO commented, “We are looking forward to working closely with the Unzipped team. BONGO is a leader in the junior jeans wear market and represents an exciting growth opportunity for TKO. Our acquisition of Unzipped and our investment in Candie's stock reflects our commitment to a fruitful and long term alliance for both companies.”
Gary Bader, President of Sales, BONGO jeans commented, “Everyone is very excited about this alliance. TKO is noted for their design and sourcing expertise which will enable Bongo to better serve our core customer. We are looking forward to working with them on a smooth transition.”