Two Commerce premium denim companies have stitched together a plan to become one.
Publicly traded Joe’s Jeans Inc. announced Monday that it will acquire privately held Hudson Clothing Holdings Inc. for $97.6 million.
Marc Crossman, president and chief executive of Joe’s Jeans, said the purchase of Hudson will allow Joe’s Jeans transformative growth opportunities.
“Once the acquisition is complete, we expect to nearly double the size of our business, meaningfully increase our international and e-commerce penetration and enhance our overall prospects for growth,” he said in a statement.
He added that the company will preserve both distinct brand identities, and that employees will continue to work in separate facilities. Peter Kim will continue as chief executive at Hudson, but will also join the board of directors for Joe’s Jeans.
“We look forward to benefiting from each other’s strengths and to entering a new chapter of growth,” he said in a statement.
In the last year, Joe’s Jeans has put significant resources into developing a stronger retail presence, though its wholesale efforts remain its core business.
Joe’s Jeans will finance the transaction with a combination of cash and $24.1 million in six-year convertible notes with a 10 percent interest rate. The public company expects to close the transaction by the end of August.
Boston private equity firm Fireman Capital Partners, which acquired a controlling stake in Hudson in 2009, sold 80 percent of its interest to Joe's Jeans and will retail 20 percent.
Joe’s Jeans also reported second-quarter net income on Monday of $13.5 million (2 cents a share), a slight decrease from the same period a year earlier. Revenue rose 8 percent, to $31 million. The results missed analysts’ expectations of 3 cents a share.
Shares of Joe’s Jeans fell more than 12 percent in afterhours trading on the Nasdaq.