Marquee Brands, the parent company of Roberto Cavalli, is set to acquire the Canadian outdoor retailer Roots Corporation, as announced in a recent company statement. The acquisition will see Roots taken private, with a focus on retaining its strong Canadian heritage.
Acquisition Agreement Details
The agreement between Roots Corporation and Marquee Brands was publicised on Thursday. As part of the deal, Marquee Brands has teamed up with JM&A Design and Development, who will serve as the main operating partner for Roots. The proposed transaction offers Roots shareholders 4.10 Canadian dollars per share in cash, representing a 36% premium on the March 2 closing price. The Board of Roots has unanimously recommended shareholders approve the deal.
Preserving Canadian Heritage
Heath Golden, CEO of Marquee Brands, expressed the significance of preserving Roots’ Canadian identity, highlighting a strategic partnership with JM&A to maintain these cultural ties. He further noted the global growth opportunities that lie ahead while maintaining the brand’s distinctive qualities.
Operational Management
JM&A will manage the design, development, manufacturing, and distribution of apparel, as well as oversee retail and e-commerce operations in Canada and the U.S. This includes handling the more than 100 North American Roots stores.
Background and Financials
Roots embarked on a strategic review in March, considering various proposals for its business. Marquee Brands, whose portfolio includes brands like Sur la Table and Laura Ashley, acquired a majority stake in Roberto Cavalli this year.
Previously, in 2020, Roots’ U.S. unit filed for Chapter 7 bankruptcy, leading to the closure of seven stores. The retailer has since initiated a turnaround strategy, focussing on closing underperforming locations. In its latest financial quarter, Roots reported a 6.5% increase in total sales to CA$42.6 million, with comparable sales rising by 3.2%. However, their net loss expanded by over 27% to more than $10 million compared to the same quarter last year.
Reporting based on coverage first published by retaildive.com.