NEW YORK, N.Y. – Clothing and fragrance company Liz Claiborne Inc. is selling its Mexx business to a joint venture led by the private equity firm The Gores Group as part of its plan to reduce its debt.
Liz Claiborne will get $85 million and an 18.75 per cent equity stake in the joint venture, according to the announcement on Friday. The Gores Group, based in Los Angeles, will own an 81.25 per cent interest.
Thomas Grote will remain CEO of the global Mexx business, while Lloyd Perlmutter will continue as CEO of Mexx Canada.
Mexx is one of Liz Claiborne’s brands that also include Juicy Couture, kate spade and Lucky Brand.
Liz Claiborne, which is based in New York, said Friday that the transaction will help in its plan to reduce its 2011 debt to a level below last year’s debt of $578 million.
The company announced plans earlier this month to cut costs and debt as it tries to shore up its balance sheet.
“At the close of this transaction, we will be a more capital efficient, growth-oriented company and will be able to fully turn our attention to building and growing our core portfolio of global lifestyle brands,” Liz Claiborne CEO William McComb said in a statement.
The deal is expected to close in the fourth quarter.
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