Why We're Buying The Haggar Clothing Company

Randa Accessories, one of the world’s leading accessories companies, announced on Tuesday, May 7 that it has entered into a definitive agreement to acquire 100% of Haggar Clothing Co. The transaction is expected to close on May 31, 2019.

Randa, a privately-held company founded in 1910, produces belts, wallets, headwear, slippers, luggage, neckwear, jewelry and other accessories under 50 brands, including Levi’s, Tommy Hilfiger, Columbia Sportswear, Dickies, and Kenneth Cole. Randa distributes its products globally through more than 20,000 stores and employs over 4,000 associates at 26 offices located in 10 countries.

Since its beginnings in a one-room office in Dallas in 1926, Haggar Clothing Co. has grown from a manufacturer of men's fine dress pants and slacks into one of the most recognized apparel brands in the market.  

"For many brand, apparel and accessories powerhouses the acquisition of a widely recognized and broadly distributed brand represents a significant inflection point in their growth and path to success," said Heath Golden, Randa Chief Strategy Officer, and the primary architect of this acquisition. "Similarly, Randa looks forward to this acquisition marking a milestone on our journey toward becoming a global leader in lifestyle brands and expanded classifications."

Along the way, this acquisition will provide new career opportunities for our associates, greater support for our brand and retail partners, and sustained growth for all stakeholders in this evolving retail marketplace.

This acquisition illustrates our commitment to becoming better at what we do best: entering new and adjacent markets and investing in our future.

• We believe that brands matter -- and Haggar and Tribal (more on Tribal, later) are highly relevant brands in their respective markets. A balanced portfolio of licensed brands, private brands and owned brands is essential to our model.
• We believe that brick-and-mortar stores matter -- and owning 80 Haggar branded stores, and a rapidly-growing ecommerce platform, will bring valuable and actionable insights to our partners and will help us to create even better products for our consumers.
• We believe that talent matters -- and the Haggar Clothing Company is brimming with talented leaders and associates at all levels and responsibilities. This acquisition will create new and growing career opportunities for associates throughout all of our organizations.
• We believe that scale matters -- through greater scale, greater scope and greater purchasing power will be a stronger partner for our retailers, brands, supply chain and employees.
• The combined companies will have 2019 revenues greater than $1 Billion.
• Not every man wears a tie every day. However, most men wear pants every day.
• And... belts support pants, and pants contain wallets.

Some Randa backstory

Randa was founded in 1910 by two brothers who sold neckwear from a pushcart on the Lower East Side of Manhattan. The company name, Randa, is actually a contraction of the name one of its early acquisitions, the Rosenberg and Apataker neckwear company. 

As department stores and retail chains consolidated and proliferated, Randa aligned with this growth by acquiring and consolidating several domestic and international neckwear companies including Wemco in New Orleans, Woodstock in London, Forsythe in Toronto, and Countess Mara in New York City. The company was the first to open an office in China to procure silk directly from the source. Today, Randa has neckwear offices in Italy, China, Canada, England, Scotland, Australia and the United States.

Seeking expansion into adjacent classifications, and to increase the company’s partnerships with leading brands and retailers, Randa entered into the leather goods business with the acquisition of America’s largest belts and wallets company, Humphreys, in 2001. Adding to the company’s leather portfolio were the subsequent acquisitions of Trafalgar Ltd. and Swank, Inc. and international joint ventures in South Africa, Asia, Australia and Central America.

Randa is currently doubling the production capacity of its factory in Guatemala, Tata Accesorios Globales, the world’s largest belt factory. This year capacity should exceed 18 million units.

Over the past five years Randa has invested over $25 million in infrastructure upgrades, including a 530,000 square foot LEED Gold certified distribution center in Reno, Nevada.

Randa also owns MCG: Market Connect Group, America's largest in-store merchandise service company, with 4,000 talented associates providing visual and selling services at 10,000 stores.

A fun fact: If you took all the belts Randa produced last year, and buckled them end-to-end, you could encircle the entire world, more than once. We sell a lot of belts.

Randa is also an early-stage investor in several DNVB's ("digitally native vertical brands" is a mouthful) including: Greats sneakers, Baboon lifestyle travelware, Knot Standard bespoke tailored clothing, and Stantt custom-made dress shirts.

And now, some Haggar backstory

Haggar was founded in 1926 by Lebanese immigrant Joseph Marion Haggar Sr.

In 1938, Haggar created the first ready-to-wear, finished bottom, pre-cuffed pant. During World War II, the company kept factories running 24 hours a day to supply over 10 million uniforms to the U.S. military. Haggar coined the word “slacks” to be worn during “slack time.” By the end of the decade, Haggar had become the largest producer of slacks in the world.

In 1980 the company began production of sport coats, vests, and Haggar "Custom Fit" suits, which allowed customers to purchase jackets and pants separately, creating a new menswear category: “suit separates.” 

Another fun fact: Since 1981 Haggar has been the exclusive provider of the Pro-Football Hall of Fame “Golden Jacket.” The company is also the official provider of Hall of Fame jackets for the Naismith Memorial Basketball Hall of Fame and the Hockey Hall of Fame.

Haggar introduced 100% cotton "wrinkle-free" pants to the market in 1992 and followed with the introduction of moisture-wicking fabrics and, in 2002, the company created pants with a "comfort expandable" waist band.

In 2009, Haggar began producing pants with sustainable fibers; saving over 130 million water bottles from landfill. 

Haggar produces both the #1-selling dress pant style, the E-CLO™ Dress Pant, and the #1-selling non-denim casual pant style in America, the Premium No Iron Khaki, according to NPD Group/Retail Tracking (POS), Dept/Nat'l Chain, Men's Dress Pant & Men's Casual Pant Category data.

The Haggar Clothing Company has over 80 branded brick-and-mortar retail locations, a dedicated direct-to-consumer ecommerce platform, and its products are sold in over 10,000 stores throughout North America.

In addition to its Haggar branded products, the company licenses and distributes Kenneth Cole men's apparel in the United States and Canada, and is also a supplier of private label menswear to many leading retailers.

And, the company provides great clothing for women, too. Haggar owns Montreal-based Tribal Inc. Tribal was founded in 1971 and is the largest women’s sportswear supplier to the specialty boutique market in North America, with over 2,400 active accounts. 

What the CEOs have to say

“The acquisition of Haggar is an important waypoint on our strategic journey,” said Jeffrey Spiegel, CEO of Randa Accessories. “Following our Moats, Boats & Bridges strategic roadmap, this acquisition allows Randa to bring its existing expertise to adjacent brands, channels of distribution, and product classifications. This transaction brings together two successful, financially strong, and complementary businesses to better serve our retail and brand partners, our associates and our consumers.”

“Randa is the ideal strategic partner for Haggar as we think about the combined strengths of our two companies.,” said Michael Stitt, Haggar CEO. “Jeff, and his extraordinary leadership team add invaluable scale, resources, expertise, and marketing, in addition to retail partnerships. They align with our core values and high standards.”

No intention to fix that which is not broken.

Haggar will remain in Dallas and will be managed by Haggar’s current leadership team. “This is a healthy company, led by a strong and respected team of talented professionals,” said Spiegel. “We intend to provide this extraordinary company with additional resources to drive our mutual success.”

Haggar associates, welcome to the Randa family. I, along with all of Randa's managers, can't wait to learn from you all.

(c) 2019, David J. Katz, New York City

{Disclosure: I am executive vice president and chief marketing officer at Randa Accessories.}

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David J. Katz is executive vice president, chief marketing officer and "alchemist-in-residence" at Randa Accessories, an industry-leading multinational consumer products company, and one of the world's largest accessories businesses. 

His specialty is collaborating with retailers, brands and suppliers to innovate successful outcomes in evolving markets. 

David is one of ten "LinkedIn Top Voices - Retail." He has been named a fashion industry "Change Agent" by Women's Wear Daily, a "Menswear Mover" by MR Magazine, a "Retail Radical" by The Robin Report, a member of the RetailWire "BrainTrust," and a "Top Writer on Innovation and Fashion" at Medium.

He is a public speaker, best-selling author, and has been featured in The Wall Street Journal, The New York Times, CNN, The Business of Fashion, Business Insider, New York Magazine, The Huffington Post, MR Magazine, and WWD.

A graduate of Tufts University and the Harvard Business School, David is a student of neuroscience, business administration, consumer behavior and "stimulus and response." The name Pavlov rings a bell.

ALCHEMY: A science or philosophy that transforms something ordinary into something meaningful, often through mysterious means.