Innovo to Buy Joe’s Jeans
NEW YORK – Seeking to join the ranks of apparel manufacturers transforming themselves into brand owners and managers, Innovo Group has agreed to buy JD Holdings, owner of the Joe’s and Joe’s Jeans trademarks, from Joe Dahan, president of Innovo’s Joe’s Jeans subsidiary and creative director of the brand, for a combination of stock and cash.
Innovo is currently the licensee for men’s and women’s denim and denim-related sportswear. If the merger is consummated, the existing licensing agreement will be terminated and Innovo will become the trademark owner.
JD would receive cash consideration of $300,000 and 14 million shares of Innovo common stock. At the end of the Nasdaq session on Wednesday, Innovo’s shares traded at $1.19, which would make the stock portion of the deal worth nearly $16.7 million. Dahan would also enter into a new long-term employment agreement with Innovo and remain creative director of the brand.
“This transaction represents a major milestone in our company’s history,” said Marc Crossman, president and chief executive officer of Los Angeles-based Innovo. “This acquisition will cap our strategic overhaul by transforming us from a lower margin private label manufacturer and brand licensee into a lifestyle brand own and manager with denim expertise focused on developing premium denim products under the Joe’s and Joe’s Jeans brands.”
Accordingly, Innovo has dissolved its international master distribution agreement for the two brands with Beyond Blue Inc and entered into a licensing agreement with The Betesh Group under which Betesh’s Generation Company division will produce and sell handbags and small leather goods, including belts and wallets, for men and women under the Joe’s Brand. The agreement with Betesh will become effective upon completion of Innovo’s merger with JD.
“This license agreement represents the first step toward generating additional revenue streams for our Joe’s Jeans business,” commented Crossman. “We believe that our trademark JD logo translates very well onto handbag and small leather good products, as well as other categories, which we believe will greatly complement our denim offerings.”
