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OshKosh B'Gosh is about to be reborn.
The acquisition of OshKosh by The William Carter Co. (Carter's) promises to reawaken one of the oldest and most recognized names in children's apparel.
"This is a unique strategic fit," said Carter's chairman and ceo Fred Rowan to analysts following news of the $312 million blockbuster deal. "It's rare that there would be an opportunity to get two of the most trusted and recognized children's brands together."
"Also," he added, "both Carter's and OshKosh have distinct brand point of views. Although they're core essential brands, they're very different and each has a billion dollars in revenue capability."
The sale comes after OshKosh in February hired Goldman Sachs to help pursue strategic alternatives, including a sale. The deal has already received approval by the Hyde-Wyman family, which controls 75 percent of OshKosh's stock, and it is expected to close during the third quarter.
Combined, the new company will generate more than $1.3 billion in sales. Carter's, the nation's sixth-largest branded marketer of children's apparel for ages newborn to 6 years old, will control about 7.4 percent of the $17.5 billion baby and young children's apparel market.
Christina de Marvel, an analyst at Sidoti & Co., says given that Carter's and OshKosh's wholesale and retail channels overlap, the combined company could gain greater clout with retailers and leverage Carter's brand management skills and distribution and supply chain infrastructure.
"We expect Carter's will be able to accelerate an emerging recovery in motion at OshKosh by helping to better define core assortments, simplify the product line and improve service to wholesale customers," says de Marvel.
Analysts say the combination makes sense because...