NEW YORK & PORTLAND - (BUSINESS WIRE) - The London Fog Group announced today that as part of its financial restructuring pursuant to its Chapter 11 reorganization, the company has agreed to sell its Pacific Trail outerwear business and related brands to Columbia Sportswear Company for $20.4 million plus the assumption of certain services. The agreement is the culmination of a public auction held yesterday in which Columbia was the highest bidder. The sale is effective today. London Fog Group also announced that its $40 million in debtor-in-possession (DIP) financing provided by Wachovia Bank, N.A. has been approved by the Bankruptcy Court. The DIP financing is intended to support London Fog Group's working capital needs during its reorganization.
In an effort to secure sufficient working capital to properly fund its core operations, on March 20, 2006 London Fog Group filed a voluntary petition to reorganize under Chapter 11 of the United States Bankruptcy Code. The sale of Pacific Trail represents a major step in the Company's plan to improve its financial position. London Fog Group continues to operate its businesses under Chapter 11, as it implements its restructuring.
David Greenstein, CEO of the London Fog Group, commented; "The divestiture of our Pacific Trail business represents a major step in our plan to financially restructure London Fog Group. We were very pleased by the broad interest in and active bidding for the Pacific Trail business. We believe the transaction is in the best interests of Pacific Trail and the talented team of professionals that lead the business. Columbia is the ideal company to continue building on the success of the Pacific Trail and related brands this season and going forward."
Trademarked brands included in the sale are Pacific Trail(R), Pac-Tech(R), Towne(R), Outdoor Unlimited by Pacific Trail(R), Black Dot and Moonstone(R).
New York-based Avalon Group Ltd. represented the London Fog Group and facilitated the auction process in conjunction with the Bankruptcy Court.
Pacific Trail is a quietly powerful brand with an 60-year tradition of quality in the outerwear and sportswear world, and roots as an authentic Northwest lifestyle brand. The brand has a powerful emotional connection to the rugged outdoor life and leisure of the Pacific Northwest, and a prominent position at major national retailers and has built a national reach and possesses a particularly attractive base of personnel, brands and assets targeting the outwear, sportswear, footwear and home textile markets. Pacific Trail is currently growing its consumer presence and retail footprint with additional licensing and new product development.
Following the completion of the Pacific Trail sale, the London Fog Group will be comprised of two principal operations:
London Fog is a great American apparel brand, ranked #32 of the top 100 brands by Women's Wear Daily. Created in the 1920s, London Fog became the ubiquitous symbol of American rainwear with the introduction of the classic trench. Today, London Fog is being made into a powerful must-have global lifestyle brand in the designer tier, showcased in the most prestigious retail venues and with the highest caliber product in fashion, accessories, outerwear and fragrance.
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