(Filed Under Financial and General Interest News). R.G. Barry Corporation, a slipper and accessory marketer with the Dearfoams flagship brand, announced on March 16 that it is acquiring the principal assets of Baggallini Inc., an Oregon-based accessory maker, for approximately $33.8 million.
The purchase is expected to finalize on March 31. Baggallini is a privately owned maker of handbags, tote bags and travel accessories founded in 1995. Its products are mostly sold at specialty and travel stores, catalogs and on-line retailers throughout North American. According to R.G. Barry, from 2006 to 2010, Baggallini recorded a compounded annual revenue growth rate of about 19 percent. It will maintain headquarters in Portland and will operate as a wholly-owned subsidiary of R.G. Barry.
As previously reported in BODY, R.G. Barry acquired Foot Petals in February. “Baggallini is our second acquisition this year; and collectively, these additions will transform our business and our future,” said Greg Tunney, president and C.E.O of R.G. Barry. “The face of R.G. Barry immediately changes from that of a one-dimensional, modest-growth slipper business company to a multi-faceted, growing provider of functional, fashionable accessories.
“Until now, our business has been almost entirely rooted in accessory footwear which accounts for only about 2 percent of the $30 billion-plus women’s accessories market. With these acquisitions, we now have established, growing businesses in the much larger handbag and foot care segments, both of which offer us significant opportunities for high growth and profitable expansion. As with our earlier acquisition, Baggallini’s key management will be joining our team to help us grow the business into a premier consumer brand.
“Today, the total breadth of our business and our revenue and earnings productivity is greatly expanded. We have added a new, much less promotional roster of specialty and independent retailers to our already strong customer base. As a result, our business is less concentrated and the blend of products that we will be marketing will include more full-priced, higher-margin goods.”
Jose Ibarra, senior vice president of finance and C.F.O of R.G. Barry, added that category-appropriate acquisitions are a key strategic growth driver for the company. “Taking an appropriate amount of long-term debt enhances the efficiency of our balance sheet, while allowing us to maintain suitable cash reserves for funding operations, capital expenditures and dividends to our shareholders,” he said.
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