Hanna Andersson sold to Kellwood

Children’s clothing cataloger/retailer Hanna Andersson Corp. has a new parent. Apparel marketer Kellwood Co. announced in June it is acquiring Hanna Andersson for about $175 million.

What does the $2 billion Kellwood Co., which specializes in branded as well as private-label product, want with the $100 million Hanna Andersson?

Kellwood hopes the acquisition will help it reach its goal of expanding into upscale brands, according to its chairman/president/CEO Robert C. Skinner, Jr. “Another part of our strategy is to connect more directly with the consumer,” Skinner said in a statement. “The Hanna Andersson business model is focused on a direct-to-consumer format with a rich media e-commerce Website, colorful catalogs, and an inviting store format.”

Founded by Gun and Tom Denhart in 1983, Hanna Andersson became known for its Swedish-inspired cotton kid’s apparel. The founders sold the company in March 2001 to a corporation owned by management and an investor group led by private-equity firm Dorset Capital.

The Portland, OR-based business now includes a catalog, 18 stores, and a Website. Kellwood plans to keep Hanna Andersson’s management in place; president/CEO Philip Iosca will continue to run the company. “Phil and his team have done an excellent job building the Hanna Andersson business over the last 12 years,” Skinner said.

A good fit

Chris Shannon, managing director for investment bank Berkery, Noyes & Co., believes the acquisition helps both sides. “It’s a good acquisition and helps Hanna Andersson, probably minimizing its postal costs by ganging up with some of the other catalogs at Kellwood.” In particular, Hanna Andersson will complement Kellwood’s Gerber Beginning, Gerber Everyday, and Gerber Onesies brands.

The deal will also help Kellwood expand its brand into a higher marketing set, Shannon says. Hanna Andersson is a high-end company, “and I don’t think Kellwood was in that space too strongly.”

Kellwood might also be interested in beefing up its Internet sales, Shannon notes, and Hanna could no doubt assist with that. “All catalog companies have a Web presence, and Hanna Andersson has a good one.”

Shannon envisions further consolidation in the catalog industry, largely due to the recent postal rate increase. And not all deals will involve big fish such as Kellwood. Two smaller catalog companies could pair up and share resources. For instance, using similar lists and doing some comailing, “can minimize their postal costs, and expand their reach,” he says.

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