Concept One Buying Drew Pearson
NEW YORK – Concept One Accessories will end 2006 with its fourth, and largest, acquisition of the year in place.
The company said Monday that it has reached an agreement to buy the assets of Drew Pearson Marketing Inc. (DPM) from Mainland Headwear Holdings Ltd., a publicly held headwear firm in Hong Kong and DPM’s biggest source of production, for $8 million in cash. News of an impending acquisition was first reported on MRketplace.com on Oct. 1.
The merger of the two firms will create a $90 million headwear and bag firm, with $70 million of its volume coming from headwear sales, making it the second largest licensed headwear firm in the U.S. behind category leader New Era.
Concept One acquired Block Headwear and The Helen Welsh Group in March and SlickCase, a maker of iPod accessories, two months later.
“We are well positioned to absorb this deal and, after a period of nine months, will begin pursuing additional companies in related categories with strong market niches,” said Sam Hafif, chief executive officer of Concept One. “We are well on our way to meet our plan for $150 million in sales by 2010.”
Mainland opted to divest itself of DPM in order to concentrate on manufacturing and to eliminate potential conflicts of interest with other U.S.-based customers.
Although Concept One hadn’t been among Mainland’s customers, a separate manufacturing agreement was inked by which Mainland will build a 125,000-square-foot factory, staffed by 1,500 employees, to handle Concept One and Drew Pearson’s woven headwear needs.
“Mainland Headwear will now gain a significant customer in Concept One and continue to build business with other U.S. importers they had not done business with in the past,” Hafif pointed out.
Concept One’s extensive brand portfolio includes hats and backpacks under a wide variety of brand names and entertainment properties, including bags for Major League Baseball, the NHL and the NBA, and headwear under brands including Southpole, Levi Strauss Red Tab, U.S. Polo Association, Original Penguin and Akademiks. It’s recently added a number of movies and the television show “24” to its sizeable stable. Distribution is strongest in department stores, specialty stores and mid-tier retailers.
DPM, on the other hand, has significant distribution in sporting goods and outdoor stores as well as in college book stores and sport venues such as baseball stadiums and auto racing arenas. Their licensing relationships include pacts with Nascar, The Walt Disney Co., Warner Brothers, Budweiser and General Mills.
Concept One will continue to maintain its headquarters and showroom on Fifth Avenue here and add DPM’s products to its home base. It will keep its office in Dallas and add facilities near Wal-Mart’s headquarters in Bentonville, Ark., and Target’s in Minneapolis.
Concept One said the combined company will have more than 20 full-time sales people, 70 independent sales reps and a design staff of over 25.
Sam and Bernie Hafif founded Concept One in 1999.
