New York & Company, Inc. Announces Acquisition of Fashion to Figure
November 28 2017 - 6:45AM
Business Wire
~ Entered an agreement to acquire all
intellectual property and select other assets ~
New York & Company, Inc. [NYSE:NWY] (the “Company”), a
specialty women’s apparel chain with 459 retail stores, today
announced that it has entered into an asset purchase agreement to
acquire certain assets of Fashion to Figure, a U.S. based retailer
of trendy plus-size fashions, including intellectual property
rights related to the Fashion to Figure® brand, for a cash purchase
price of $1.4 million plus no more than $1.0 million of fees and
expenses. The assets will be acquired by TFT Acquisition LLC, as
the successful bidder at an auction run by Fashion to Figure, as
part of its ongoing reorganization under Chapter 11 of the U.S.
Bankruptcy Code and will be subsequently acquired by New York &
Company late in the fourth quarter of fiscal 2017. The asset
purchase agreement covers all intellectual property, including
trademarks, tradenames, an extensive customer database, and all
in-store assets, with the exception of inventory. All lease
obligations are expected to remain with the seller; however, the
Company anticipates contacting various landlords in an effort to
negotiate satisfactory agreements regarding future lease terms to
remain in certain existing Fashion to Figure locations. New York
& Company is also anticipating hiring certain former employees
of Fashion to Figure, including members of the design,
merchandising and eCommerce teams, who are expected to join the
Company during the fourth quarter of fiscal year 2017. The Company
will also be negotiating with certain market vendors in an effort
to secure inventory for the anticipated relaunch in early 2018.
Fashion to Figure was founded in 2004 by Michael and Nicholas
Kaplan who are the great-grandsons of Lena Bryant, the founder of
the plus-size clothing chain Lane Bryant. Fashion to Figure has
become well known for providing on trend fashion options for
women's plus-size clothing and related accessories. The store's
name was derived from a quote Lena Bryant made in a 1950 interview
in which she stated, "You should never ask women to conform their
figures to fashion, but rather bring fashion to the figure." The
closing of the transaction is expected to occur late in the fourth
quarter of 2017, positioning the Company to re-introduce a
revitalized Fashion to Figure brand to the marketplace in early
February 2018 through an online site and select Fashion to Figure
stores, thereby providing the Company an opportunity to capture a
significant portion of the former Fashion to Figure’s existing
profitable sales.
Gregory Scott, New York & Company’s CEO stated: “We are
excited to expand into the Plus Business with the acquisition of
Fashion to Figure’s intellectual property, as we believe that the
business the Kaplans built has true brand potential and has a brand
platform that is compatible with New York & Company. We believe
Fashion to Figure has strong name recognition with the Plus-size
consumer and a very loyal consumer base, with a database of
approximately 500,000 customers, that we believe we can effectively
leverage to grow the brand, particularly online, to drive
profitable future growth. We see an opportunity to enter into an
underserved and growing segment of the women’s apparel market. In
fact, NPD estimated the size of the women’s plus-size apparel
market was approximately $21 billion in 2016, and has grown at
more than twice the rate of the overall U.S. women’s apparel market
and this outsized growth is expected to continue. We believe the
combination of Fashion to Figure’s outstanding brand equity and
expertise in the Plus-size space coupled with New York &
Company’s operational expertise, omni-channel capabilities, strong
digital business, and celebrity platform will enable us to generate
significant top line growth and sustained profits with the Fashion
to Figure business while ensuring to preserve its existing brand
DNA. We look forward to working with the Kaplans to reintroduce the
brand to the marketplace and to Fashion to Figure’s loyal customers
at the start of our new fiscal year.”
The Company expects to fund the entire purchase price of the
acquisition of the intellectual property, as well as any subsequent
inventory purchases, with cash on hand. As of October 28, 2017, the
Company had $69.2 million of cash and no borrowings under its asset
based credit facility.
As previously announced the Company will release third quarter
fiscal year 2017 results after the market closes on Wednesday,
November 29, 2017. The Company will conduct a conference call at
4:30 p.m. Eastern Time on the same day to discuss its results of
the third quarter and guidance for the fourth quarter, but does not
expect to discuss specific forecasts or metrics related to the
acquisition of Fashion to Figure until later in fourth quarter
after the transaction closes.
About New York & CompanyNew York & Company,
Inc. is an omni-channel women’s fashion retailer designing on-trend
and versatile collections at a great value. The specialty retailer,
first incorporated in 1918, has grown to now operate 459 retail and
outlet locations in 39 states while also growing a substantial
eCommerce business. Its branded merchandise, including
collaborations with Eva Mendes and Gabrielle Union, is sold
exclusively at these locations and online at www.nyandcompany.com.
Additionally, certain product, press release and SEC filing
information concerning the Company are available at the Company's
website: www.nyandcompany.com.
Forward-looking StatementsThis press release contains
certain forward-looking statements, including statements made
within the meaning of the safe harbor provisions of the United
States Private Securities Litigation Reform Act of 1995. Some of
these statements can be identified by terms and phrases such as
“expect,” “anticipate,” “believe,” “intend,” “estimate,”
“continue,” “could,” “may,” “plan,” “project,” “predict,” and
similar expressions and references to assumptions that the Company
believes are reasonable and relate to its future prospects,
developments and business strategies. Such statements are subject
to various risks and uncertainties that could cause actual results
to differ materially. These include, but are not limited to: (i)
Final closing on the sale of the related assets; (ii) the Company’s
reliance on certain projections including the size of the database
and the sales expectations for fiscal year 2017 as provided by
Fashion to Figure; (iii) the Company’s dependence on mall traffic
for its sales and the continued reduction in the volume of mall
traffic; (iv) the Company’s ability to anticipate and respond to
fashion trends; (v) the impact of general economic conditions and
their effect on consumer confidence and spending patterns; (vi)
changes in the cost of raw materials, distribution services or
labor; (vii) the potential for economic conditions to negatively
impact the Company's merchandise vendors and their ability to
deliver products; (viii) the Company’s ability to open and operate
stores successfully; (ix) seasonal fluctuations in the Company’s
business; (x) competition in the Company’s market, including
promotional and pricing competition; (xi) the Company’s ability to
retain, recruit and train key personnel; (xii) the Company’s
reliance on third parties to manage some aspects of its business;
(xiii) the Company’s reliance on foreign sources of production;
(xiv) the Company’s ability to protect its trademarks and other
intellectual property rights; (xv) the Company’s ability to
maintain, and its reliance on, its information technology
infrastructure; (xvi) the effects of government regulation; (xvii)
the control of the Company by its sponsors and any potential change
of ownership of those sponsors; (xviii) the bankruptcy court
process and satisfaction of closing conditions; and (xix) other
risks and uncertainties as described in the Company’s documents
filed with the SEC, including its most recent Annual Report on Form
10-K and subsequent Quarterly Reports on Form 10-Q. The Company
undertakes no obligation to revise the forward-looking statements
included in this press release to reflect any future events or
circumstances.
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version on businesswire.com: http://www.businesswire.com/news/home/20171128005519/en/
Investors/Media:ICR, Inc.Allison Malkin, 203-682-8200
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