THE AUSTRALIAN: Katherine Jimenez
Deutsche Bank is aiming to build a substantial presence in the fragmented clothing wholesale market through a new retail brand wholesale company, Pacific Apparel Solutions, and then sell it to the public.
Former Myer director Eric Morris was recently recruited to head the company, after it acquired the majority interests in clothing brands Yarra Trail and Breakaway.
Mr Morris plans to use Pacific to “aggregate” clothing wholesalers into a group with scale and market clout. “There’s a lot of synergies when you start getting all these companies together in terms of sourcing and back-office functions,” he said.
Mr Morris, who has “a budget to go out shopping”, said the group had its eye on several other acquisitions.
“We are not sure where it’s going to stop, but we are probably talking to another five companies at the moment, and at various stages of negotiation,” he said.
“So the group in the not-too-distant future could have about six or seven companies in it.”
“It may get larger after that as well because of the nature of the fragmented industry in Australia and also … the relatively soft trading conditions right now.”
“There are a lot of offers coming on the table for us to be involved”.
Mr Morris, who has been in the job for only four weeks, said the companies Pacific was looking at were well-established brands in men’s, women’s and children’s wear.
He said it might broaden into accessories.
Yarra Trail is a mainstream clothing brand aimed at the 25-40 age group. Breakaway is also a mid-market brand but targets a slightly older customer. Both brands are mostly sold through Myer and David Jones.
While Pacific’s first two acquisitions were in the mid-market sector, Mr Morris said it wanted to have a variety of brands in its stable. Mr Morris was hand-picked by Myer chief Dawn Robertson to head its private label push. Before Myer, he was the regional director for Reebok Asia Pacific.
Pacific is expected to be listed in three to five years with a value of more than $200 million.
Other players in the wholesale retail sector are Pacific Brands, which owns Bonds, Globe International, Gazal Corp and Oroton Group.
There were reports last year that Pacific Brands was interested in buying Gazal.
Pacific Apparel is 80 per cent owned by Deutsche Bank’s private equity fund. Mr Morris also holds a small share.