A combination of two major Polish brands of upmarket women’s clothing is on the cards, after Monnari Trade submitted a non-binding offer to buy Simple Creative Products from Gino Rossi. Monnari is offering to pay between PLN 46m (€11.1m) and PLN 50.5m (€12.2m) for 100% of shares in Simple, assuming that the firm is both cash- and debt-free. The actual purchase price is to be determined after a due diligence.
The acquisition would be in line with the company's growth strategy, which includes takeovers of other clothing firms, Monnari said. It is Monnari's expectation that a definitive agreement will be signed by 30 April 2018.
In a statement informing the stock market about the offer from Monnari, Simple’s parent Gino Rossi revealed that it had embarked on a search for a strategic investor for Simple already in November 2017, after obtaining formal approval from its supervisory board.
By divesting the clothing business, Gino Rossi will reduce its debt and free up resources to focus on its core business, i.e. the eponymous brand of leather shoes and accessories, where the main growth opportunities lie. The combination of Gino Rossi and Simple has exhausted itself in the current market conditions – there is little synergy between the two brands, and they will fare better independently, Gino Rossi’s CEO Tomasz Malicki explained.
Simple has a strong, well-recognised brand, good collections, and a very well-developed e-commerce business, which is a major asset in view of the forthcoming restrictions on Sunday trade, Mr Malicki added. The transaction will require approval from the Office of Competition and Consumer Protection (UOKiK), which will probably take about three months to obtain, he also noted.
Simple Creative Products has about 60 owned stores in Poland, while Monnari Trade operates about 160 stores in the country. Both retailers have an online store.