Haggar Clothing Co, a well-known marketer of men’s casual and dress clothing, is going on the block, The Post has learned.
The Dallas-based apparel maker, which helped popularize the term “slacks” in the 1940s, has retained Bear Stearns Cos. to help it explore strategic alternatives – including a possible sale, sources familiar with the situation said.
The investment bank is in the process of putting together an offering memorandum to distribute to potential buyers.
A Haggar spokeswoman could not be reached for comment.
A sale would likely put the publicly traded company into the hands of a major apparel company or private-equity firm, which would be attracted to its established brand name and steady growth prospects in certain lines, sources said.
Possible suitors may include companies such as VF Corp. or apparel sourcing giant Li & Fung, which is sitting on a pile of cash and has been looking for acquisitions that it could plug into its network of factory contacts in Asia, sources said.
Several middle-market private equity firms with a track record of investing in the apparel industry are also expected to take a look.
It is unclear how much the company would be worth. The company generates roughly $450 million in revenue, but less than $20 million in earnings before interest, taxes, depreciation and amortization, sources said.
Shares of Haggar fell 2 cents to $16.89 in Nasdaq trading yesterday. Based on its current stock price, Haggar has a market capitalization of almost $120 million. The company has $2 million of debt and about $25 million in cash on its balance sheet.
The company makes men’s casual and dress apparel and women’s sportswear under its own name that are sold through department stores such as J.C. Penney and Wal-Mart. It also holds licenses for Claiborne and Kenneth Cole brands.
Haggar has been struggling for the past few years to grow its earnings and keep pace with the increasingly competitive retailing environment.
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Haggar clothing (stock chart)
Close: $16.89