An investment company owned by two French designers has drastically increased its stake in I.C. Isaacs & Co. Inc. and is now its biggest shareholder, the Baltimore and New York-based sportswear designer and marketer said yesterday.
Eugene C. Wielepski, chief financial officer of I.C. Isaacs, said that the investment company owned by designers Marithe and Francois Girbaud increased its position in the publicly traded firm from 5 percent to 40 percent.
News of the deal boosted I.C. Isaacs' shares in the over-the-counter market, where they closed yesterday at a 52-week high of $1.18, up 43 cents.
The investment company - called Textile Investment International S.A. - bought 666,667 shares of I.C. Isaacs' common stock and 3.3 million shares of Series A convertible preferred stock from Ambra Inc. for an undisclosed amount.
Textile also bought a $7.2 million promissory note payable to Ambra, which once licensed the BOSS brand name to I.C. Isaacs.
The deal has been signed and awaits shareholder approval, Wielepski said.
"We license [Girbaud] products and we're probably their major licensee, so they have decided they want to become more involved with us," Wielepski said.
"We want them to invest in us and provide additional support and closer ties."
Francois Girbaud said in a statement yesterday: "We see greater potential for broader development and distribution of the brand and look forward to significantly expanding our business in the United States."
Ambra officials could not be reached for comment.
I.C. Isaacs sells lines of jeans wear and sportswear for men and women solely under the Girbaud brand name in the United States, Puerto Rico and Canada. In recent years, I.C. Isaacs has shed several costly licensing deals with other clothing brands, such as BOSS and Beverly Hills Polo Club, to focus on the sale of the Girbaud line, Wielepski said.
The move appears to be working. The company reported yesterday that its first-quarter net income increased to $1.6 million, or 21 cents per share, compared with net income of $639,000, or 8 cents per share, in the first quarter of 2001.
Sales for the quarter, which ended March 31, dipped 15 percent to $20.2 million, largely because of the company no longer selling non-Girbaud product lines, I.C. Isaacs said.