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Renown to Sell Off Aquascutum

20 October 2008
Introduction
Real estate and 400 employees to also be cut lose
Keywords:
Renown
Number-three Japanese apparel company Renown Inc. has confirmed the sale of its long-time subsidiary — iconic British clothing brand Aquascutum. The buyer and timing have not been announced, although Women's Wear Daily has suggested a planned management buyout from Aquascutum CEO Kim Winser. Renown will most likely retain license rights for the brand in Japan.

Renown originally bought Aquascutum in 1990 for $120 million. But now in the midst of massive restructuring due to years of continuous underperformance, the apparel giant must take bold steps to regain profitability. In addition to the Aquascutum sale, Renown will unload a few of its key buildings in Tokyo and Osaka as well as lay off 400 employees (300 full-time, 100 contract workers). Sixteen of the lowest performing brands will be axed.

As recent as early 2008, Renown insisted that Aquascutum would be at center of the company's rebound, but analysts grew to see the British brand's sale as an inevitable step.

The sale of Aquascutum is projected to cause a ¥1.5 billion operating loss for the fiscal year ending in February 2009, although personnel costs will decrease by ¥2.7 billion.

Now hoping to get back into the black by 2010, Renown will focus resources on its best-selling D'Urban and other department store brands.