6 Aug 2008 07:05
MARCHPOLE HOLDINGS PLC ("MARCHPOLE") AND DONNA KARAN INTERNATIONAL INC ("DKI") ENTER INTO MENSWEAR JOINT VENTURE
6 August, 2008- London, England and New York, New York -- Marchpole Holdings plc, (LSE: MPH), the fashion brand management group, and Donna Karan International Inc announce that they have entered into a joint venture and strategic licensing agreement under which Marchpole will source, design, produce and distribute a full range of DKNY menswear apparel with the active involvement of DKI in New York.
The Spring 2009 seasonal collection, which will carry the DKNY Black Label, will be the first collection offered by Marchpole under this agreement. This line, which will be targeted for the bridge or "second line" market, will be offered to high-end department and speciality stores in addition to DKNY's extensive retail network, including approximately 60 DKNY free-standing stores globally.
The sportswear portion of the DKNY men's apparel line will be distributed in North America, Europe, Africa, the South Pacific, Middle East and Asia. The agreement is for an initial period of seven years, with an option to extend the licence for an additional seven years. A new company ("Newco") has been formed to carry on the business of the joint venture between Marchpole and DKI. Newco will be owned initially as to 90 per cent. by Marchpole and as to 10 per cent. by DKI. DKI's holding may be increased to 15 per cent. in year three and to 20 per cent. in year seven upon the exercise of warrants which it will hold over Newco shares. Newco's shareholder's agreement contains a put option which will give DKI the right to require Marchpole to buy all of its holding in Newco (in the event of a change of control at Marchpole) at a price to be determined by an independent valuer at that time.
Michael Morris, Executive Deputy Chairman of Marchpole commented: "I am delighted that we have reached this agreement with the very prestigious Donna Karan International, part of the Louis Vuitton Group and that we will have the opportunity to expand our business in the highly lucrative Far East and Middle East markets. The DKNY brand is recognised worldwide as one of the leading international lifestyle fashion collections and is a wonderful addition to our collection of luxury fashion brands. The Board believes that this joint venture is a great endorsement of Marchpole's expertise in the fashion brand management industry and we look forward to the next stage of the Company's development, delivering growth and better shareholder value over the medium to long term."
Mark Weber, Chairman and CEO of DKI said, "This joint venture agreement reflects our ongoing commitment to expanding our men's product lines, and marks the next step in the evolution of our business. Since joining DKI, I have been keenly aware of the real opportunity that exists to build the DKNY brand and capture the enormous potential in the men's bridge market. We are confident that Marchpole will be a good partner for us as we grow our merchandise mix, pursuing our objective of a complete men's lifestyle brand."
Mark Weber will join the board of this new joint venture. Tisha Kalberer, Chief Financial Officer of DKI, will also have a non-voting position on the joint venture's board. DKI and Marchpole have also agreed to appoint an independent director, Gene Rothkopf, of the US-based firm, Jassin O'Rourke to the board of the joint venture. Jassin O'Rourke acted as advisors to Marchpole. The other directors of the joint venture's board are Michael Morris and Chris Phillips of Marchpole.
Enquiries:
Bell Pottinger Corporate & Financial 020 7861 3232
David Rydell/Emma Kent/Amy Rajendran
Marchpole Holdings plc 020 7908 7777
Michael Morris, Executive Deputy Chairman
Donna Karan International +1 212 789 1857
Patti Cohen
Shore Capital 020 7 408 4090
Pascal Keane
Note to Editors:
About Marchpole
Marchpole Holdings plc ("Marchpole") is an international brand management group that designs, produces and sells clothing and accessories for ten globally recognised fashion labels. It operates in all of the world's main markets - UK, mainland Europe, Middle East, Asia and the USA
Its respected brands include Boateng, Emanuel Ungaro, Ungaro Homme, Jean Charles de Castelbajac ("JCC"), Jean Charles de Castelbajac / Rossignol, Jean Charles de Castelbajac/Okaidi, Jean Charles de Castelbajac / New Era, JCDC/Lee Cooper and Homebody and Homemummy
Marchpole is known for its integrated approach to brand management, taking a brand from concept to design studio to the customer interface.
The Group has grown considerably in the past four years, from a licensee with a single core licence to today's international business that manages its brands across a multitude of clothing lines and accessories
Marchpole's acquisition (March 2006) of Moda America - the US licensee for leading designer Emanuel Ungaro - provided further growth opportunities in the UK and America and strengthened the Company's relationship with Ungaro
The acquisition also enabled the Company to launch the Ungaro brand, already established by Marchpole in Europe and Asia, into the US, Canada and South America. The acquisition has also enabled the Company to re-launch JCC into America.
In March 2007 Marchpole acquired 100% of Greenmark Limited, an importer and wholesaler of ladies shoes who currently supply in excess of 2.5 million pairs of shoes per annum.
About Donna Karan International
Donna Karan International is one of the world's leading fashion design houses. It designs, markets and distributes collections of women's and men's apparel, sportswear, accessories and shoes under the Donna Karan and DKNY brand names. The Company has selectively granted licenses for the manufacture and distribution of beauty and beauty related products, jeanswear, activewear, men's furnishings, men's tailored clothing, hosiery, intimate apparel, coats, children's apparel, watches, eyewear and home. Since November 2001, Donna Karan International has been part of LVMH Moet Hennessy Louis Vuitton, the world's leading luxury goods group.
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