THE AGE:  Rebecca Urban

Leading clothing and accessory brands Review and Fiorelli are the latest assets in the rag-trade business to be snapped up by a private equity fund.

The PAS Group, a diversified apparel business that DB Capital Partners set up, yesterday announced the acquisitions for an undisclosed sum.

It has also bought Melbourne-based accessories wholesaler Capelle, which provides branded products as well as licensed products for companies such as JAG, Diana Ferrari and Blazer.

The PAS Group, formerly Pacific Apparel Solutions, now has seven businesses under the same banner and plans to expand aggressively before it considers a public listing over the next one to three years.

Group managing director Eric Morris said all were outstanding businesses that provided opportunities for further growth and synergies. “They have established themselves as dominant brands in their respective markets, which makes them an ideal fit with our business strategy,” Mr Morris said.

“Our growth plan involves acquiring businesses that have established themselves as strong performers in the Australian market, work with management to identify how we can ensure continued growth and identify opportunities to leverage across the group.”

Earnings before interest and tax for the combined group has grown to more than $30 million, with brands – including Yarra Trail, Breakaway and Designworks – sold at more than 1800 stores, including Myer and David Jones.

The latest purchases come amid intense corporate activity in the retail and apparel sectors, typified by Taxes Pacific Group and Newbridge Capital’s $1.4 billion purchase of Myer in June and more recently Affinity Equity Partners’ bid for Colorado.

Retailer Kathmandu was part sold to Quadrant Private Equity earlier this year, and Gresham Private Equity recently paid $130 million for Witchery.

Review was founded in Collingwood in 1985 as a small wholesaler by designer Jayne Ellis and textile merchant Peter Strain. It has 13 women’s wear stores in four states.

Capelle and Fiorelli, which supplies accessories to more than 500 retailers, was started by Peter and Kay Collings. Each founder will continue to run their respective businesses and will retain substantial minority shareholdings.

DB Capital Partners director Albin Kurti said the group was first attracted to the apparel sector because of its high earnings to operating cash flow, the “made to order” nature of the business, and high industry fragmentation.

He said that group was continually assessing potential acquisitions.

 


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