The brand management companies such as Authentic Brands Group and WHP Global get all the attention as the fashion industry’s most likely acquirers. But there are still a handful of strategic purchasers in the mix. Randa is one of them.
Mere weeks after completing its purchase of Totes Isotoner, Randa Apparel & Accessories has added another brand to its portfolio: XIX Palms.
The Los Angeles-based women’s brand, pronounced 19 Palms, was founded in 2015 by sisters Ali Mardian and Ashley Chegren and is known for its tropical prints. Its motto is: “Designed for sunshine, made for escape.”
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At Randa, XIX Palms will be managed by the company’s Tribal Sportswear’s women’s team based in Montreal.
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“Randa’s corporate general big picture strategy is to be in businesses where we can be the market leader within a given classification and distribution,” said David Katz, executive vice president and chief marketing officer of Randa. “We are the market leader in men’s accessories, both in belts and wallets and some of the other classifications we make. We are now becoming a market leader in the women’s accessories businesses. If it wasn’t for handbags, we’d probably be there already. But we don’t do handbags yet. We have Haggar, which is the number-one non-denim pant brand in America. Tribal is the number-one women’s sportswear brand in specialty distribution. They sell 2,400 mom-and-pop independent women’s specialty stores across the U.S. and Canada. Totes is the number-one umbrella brand and Isotoner is the number-one glove.”
But to continue to grow, Katz said, Randa needs to add new classifications and distribution channels to attract different consumers. And XIX Palms fits the bill.
“One of the challenges you have when you’re a big wholesale business,” Katz said, “is you don’t have great direct relationships with consumers. We’re selling to all the big department stores: Amazon, Costco, Walmart, Nordstrom. But we don’t have a lot of direct consumer relationships, so a lot of the things that we’re doing now are making us closer to consumers, giving us new data, letting us know their changing preferences, which we can also leverage in our wholesale channels and share with our wholesale partners.”
In the case of XIX Palms, the brand allows Randa to attract a different customer than Tribal. “The consumer that gravitates to Tribal has an affinity for prints — they’re bold, they’re bright,” said Linda Del Percio, director of marketing and e-commerce for Tribal Sportswear. But XIX Palms has more of a “tropical, coastal vibe.”
The relationship between the two companies started as a licensing deal where Tribal licensed the use of XIX Palms’ patterns for a year, Katz said. The response was so strong — particularly in coastal areas — that Randa approached the sisters about buying the business, and they agreed to sell. Mardian, who served as designer, will continue to serve as a consultant while her sister, who ran the financial part of the business, will exit, they said.
So while the deal only closed this week, Tribal has already helped XIX Palms expand into swimwear, denim and sports-related products for tennis, pickleball and other leisure activities. In addition, Randa leveraged its manufacturing clout and sourcing capabilities to ensure all XIX Palms’ wovens use EcoVero yarn and all denim uses BCI cotton. That product will hit the market for spring 2025, Del Percio said.
Randa declined to reveal the price it paid for XIX Palms, but Katz said, “Based on our scale, it won’t have a dramatic effect on total revenue, but it should be a nice increase for our Tribal business.” Tribal is approaching $100 million in sales.
“The acquisition enhances our portfolio with XIX Palms’ unique, bold and tropical designs, which strengthen our market position,” said Steven Richman, president and CEO of Tribal. “We’re excited about the opportunities this brings and look forward to integrating XIX Palms’ creative vision into the Tribal family.”
Tribal was founded 53 years ago in Montreal and came to Randa as part of its deal to buy Haggar from its private equity owners in 2019. That acquisition took Randa into the apparel end of the fashion business.
“When we bought Haggar,” Katz admitted, “we were a little afraid of the women’s sportswear business and the fact that the distribution was considerably different than Haggar or Randa’s. They’re not selling big chains. They’re selling 2,400 independent specialty stores. But we have learned to genuinely love this business. It’s trunk shows, sales reps calling on these accounts, thousands of skus every season. It’s a very nice margin business with a lot of reliability and very little bad debt. These customers pay their bills on time. They’re owned by the people who run the businesses, and they’re out there in the stores. It has continued to grow every year that Randa has owned it, and now it’s going to grow even further.”
Although XIX Palms is the newest addition, Randa hasn’t forgotten its brother brand, Haggar. When it was acquired, the brand operated some 60 outlet stores, but those were closed during the pandemic since they didn’t fit into Randa’s plans to elevate the brand. In addition, Randa has strong relationships with off-pricers such as Ross Stores, Burlington Coat Factory and T.J. Maxx if it needs to clear product, so there’s no need to operate outlet stores. “We didn’t feel it was the best expression of the brand,” Katz said, “but we do believe in brick-and-mortar.”
To prove that point, Randa has opened two full-price Haggar stores — one street location on West Armitage Avenue in Chicago’s Lincoln Park neighborhood and a second at the Fashion Centre mall at Pentagon City in Arlington, Va.
“Our new stores in Chicago and Washington, D.C., represent a significant milestone for our brand, as they allow us to connect deeper with our customers and offer them an immersive, personalized shopping experience,” said Jonathan Potter, senior vice president of marketing for Haggar. “Our goal is to create a space where our brand values are brought to life.”
In addition, he said, the stores will serve as a testing ground to learn firsthand what’s working with consumers and what’s not. “Ultimately, they will be a breeding ground for us to continue to maintain our number-one market share position in dress and tailored clothing as well as polished casual.”
Hacker Plotkin, senior vice president of business development for Haggar, said the stores will also help the brand with the development of its line, which will benefit its wholesale business.
“These stores allow us to learn from our customers to make us better at what we do in our core business,” Plotkin said. “By seeing firsthand what our customers desire, we’re able to react and offer our wholesale partners innovative, stylish, and in-demand products.”
Since the stores opened, the executives said, there have been some surprise bestsellers, such as a sweater polo that hasn’t gotten much traction at department stores, which tend to buy mainly bottoms from the brand.
But while the team is optimistic about the success of these units, there are no plans to open a fleet of Haggar stores, Katz said. “Our goal is not to open a chain of 50 or 100 or 200 full-line retail stores. Our goal is to understand consumer behavior and serve them and listen to them better. And it may require that we have some more stores to do that, but these are the first two. One mall, one off mall. We want to get some experience that can guide us as to whether we should have more stores. Should they be in other locations? Should they have similar footprints or different footprints? That’s something Jonathan and Hacker are going to be analyzing and advising us on.”
Randa Apparel & Accessories is a privately held company founded in 1910 and produces accessories under 30 brands and licenses, including Levi’s, Tommy Hilfiger, Columbia Sportswear, Dickies and Calvin Klein. It distributes its products globally through more than 20,000 stores and employs more than 2,000 associates at 30 offices located in 10 countries.
As large as it is, Katz said to expect Randa to get even larger in the future. “We have a lot of dry powder to do some large acquisitions. We’re still out there hunting, and looking, and we are ready when the right opportunity comes up.”