Magazine article Black Enterprise

Simmons Gets $140 Million for Clothing: Hip-Hop Impresario's Pockets Are 'Phatter' with Sale of Urban Wear Clothing Line

Magazine article Black Enterprise

Simmons Gets $140 Million for Clothing: Hip-Hop Impresario's Pockets Are 'Phatter' with Sale of Urban Wear Clothing Line

Article excerpt

In a deal that surpasses the sale of his successful rap record label Def Jam, which sold in 1999 for $100 million, Russell Simmons, CEO of Rush Communications (No. 14 on the BE INDUSTRIAL/SERVICE 100 list with $260 million in sales), has sold his urban clothing empire, Phat Fashions L.L.C. to Kellwood Co. for $140 million. At press time, the deal was expected to close in early February.

Under the terms of the agreement, Phat Fashions, which includes Phat Farm and Baby Phat, will become a subsidiary of Kellwood, the $2.4 billion St. Louis-based clothing marketer. The buyout follows a licensing deal that was landed late last year for Run Athletics activewear for men and DJU sportswear for young men and juniors. Simmons still wholly owns both entities.

"It's important that we [black-owned companies] grow, and many of us are in partnerships with companies that have short-term vision and are not willing to take the chances to make your company grow and expand," says Simmons on why he decided to sell. "[Kellwood is] successful at what they do and will work to take Phat Farm to another level."

Hal J. Upbin, Kellwood's chairman and chief executive officer, says they, "studied the urban lifestyle market for some time," before reaching a decision. "The market represents purchases by consumers at retail of approximately $10 billion on an annual basis. Phat Farm and Baby Phat are highly sought-after brands, and we believe they represent the crown jewels of the urban business," Upbin contends. Phat Fashions raked in a reported $615 million in 2003. …

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