Thursday, June 22, 2006

Blue Holdings Getting Up Against the Wall

This Tuesday Blue Holdings, Inc., struck a deal to acquire Long Rap, Inc., which owns the Up Against the Wall retail chain. Long Rap, Inc. shareholders will get $16 million in cash and $16 million in common stock. Up Against the Wall has 24 stores in California, Maryland, Washington DC, Florida and Virginia (selling Seven for all Mankind, True Religion, Antik, LRG etc.). Las Vegas, Nevada, and Sacramento, California will see new store openings before year end.

Blue Holdings is a publicly trade company (NASDAQ: BLUE) that owns Antik Denim and licenses Yanuk, U and Taverniti So Jeans. Their current distribution is 80% specialty stores and 20% department stores.

Its Chairman/CEO/President Paul Guez has always wanted his own stores, as indicated in a recent interview with The move makes sense. Having their own channels allows Blue Holdings to identify and incubate new labels to market while maintaining strong control over how a brand is sold. Yet to open their own stores without an established player would have been risky, especially when all they have to offer is denim. Now the company can diversify with multiple fashion categories to ride out trends and obtain longevity.

As Adriano Goldschmied said in a recent DNR event, "when you open a store it's not about ego- 'Wow, I have a store!' -it's about being able to make your customer happy. You need to be in the position to offer the best in every single category...But, honestly, if you are not at that level, instead of making a positive thing you are making a negative thing."

Blue Holdings Website
Business Wire Press Release Paul Guez Interview (Audio)