Jeans Maker 7 for All Mankind Sold For $775 Million

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Last week’s $775 million acquisition of Los Angeles-based premium jeans maker 7 for All Mankind LLC by VF Corp. is the latest example of large apparel companies paring down their brands to focus on the more high-profile lines with a strong retail presence.


“The new world of retailing is brand development into retail development as opposed to retail development looking for brands,” said Ilse Metchek, executive director of the California Fashion Association. “The strategy is, in today’s retail market, if a brand is not worth thinking about as a retail store concept, then get rid of it.”


A brand must be able to open its own retail stores, Metchek said, and 7, which sells jeans for well over $100 each, is one of the few denim brands that is in a position to do so.


Greensboro, N.C.-based VF said it hopes to open as many as 100 7 retail stores in the next 10 years. The brand currently operates two retail locations.


Since it was started in 2000, 7 has built a cult following for its pricey pants, and along with competitors like True Religion and Paper Denim & Cloth, has carved out a lucrative niche in the denim market.


7, which is sold primarily in high-end boutiques and upscale department stores, has operating margins of more than 20 percent and expects revenue of about $300 million in 2007.


VF’s brands include Lee and Wrangler jeans, as well as Vans shoes and North Face outdoor apparel. In addition to the deal for 7, VF paid $110 million to acquire Portland, Ore.-based Lucy Activewear Inc., which will be used to form a new division within the company called VF Contemporary Brands. VF said it expects the new division to bring in $350 million in revenue during its first year and grow at an annual rate of 20 percent for the next five years.


Mike Egeck, 7’s current chief executive, will become the president of the new division.


These moves come as a consolidation in the apparel industry has a number of apparel makers shedding lower-profile brands to focus on higher-fashion and higher-priced lines.


New York apparel giant Liz Claiborne Inc. announced this month plans to get rid of 16 of its 36 brands to focus on its more high-profile lines, while Bristol, Penn.-based Jones Apparel Group Inc. said this year it will drop its underperforming lines.

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