Marketing conglomerate Alloy, Inc. will buy retailer Delia’s Corp. for $50 million. Adding Delia’s $138 million business extends Alloy’s reach to teen girls via Delia’s 64 retail stores and its online and catalog operations. (Alloy already sells apparel and accessories to girls online.) It also gives promo shops 360 Youth and AMP, both owned by Alloy, another venue for teen promos.
Delia’s has been struggling, posting losses for the last three years. Sales fell 36% to $138 million in fiscal 2002 from $215 million in 2000 as the retailer sold off or shut down non-core business and its core-business sales stayed flat. Promotion pricing and weak second-half sales hurt Delia’s profit margins last year, per Delia’s SEC filings. Brick and mortar stores account for 51% of Delia’s sales, with online and catalog sales at 49%.
Still, Delia’s will boost Alloy’s revenues to $300 million. Alloy also gets Delia’s 14.6 million-name database, bringing its database to 20 million-plus. The merger “will create the premier teen multi-channel merchandise business,” said Alloy CEO Matthew Diamond in a statement. It rounds out Alloy’s direct marketing, retail and product licensing targeting teens, he adds.
Alloy already has begun management changes at troubled Delia’s, hiring former J. Crew COO Walter Killough, Jr. to head up Delia’s retail. Alloy seeks other senior retail execs, and will pursue other investment options for the merchandise business, including possible merger, sale, or a full or partial public spin-off.
The deal should close in the third quarter via Alloy subsidiary Dodger Acquisition Corp. Stockholders with about 35% of Delia’s outstanding shares have agreed to the purchase; both boards of directors already approved the deal. Both companies are based in New York City.
Toyota signed a multiyear deal with the Houston Rockets to name the NBA team’s new arena the Toyota Center. The deal marks the first time Toyota has taken title sponsorship of an arena. While Toyota will benefit locally from the sponsorship, the company was also attracted to the foreign exposure that Chinese basketball star and Rockets center Yao Ming offers. “As a leader in the worldwide market, Toyota will also be able to enhance its brand awareness in Asia through the international exposure offered by the Houston Rockets,” said Toyota Motor Sales U.S.A. Corporate Marketing Manager Deborah Wahl Meyer in a statement.
Flint, MI-based Buick will take over title sponsorship of The Greater Hartford Open starting in 2004. The PGA Tour tournament will be renamed the Buick Championship and the General Motors brand will sponsor for three years.