Wednesday, October 18, 2006

True Religion Update

Let's check in on True Religion (NASDAQ: TRLG). For a while we've been speculating what the company had in mind when it signed Goldman Sachs as financial adviser.

Yesterday Marilyn Much on Investor's Business Daily (Yahoo Finance) gives her take on it.

"It could be any number of things,from taking themselves private to a sale or just a strategic advisory on how to grow the business," said analyst Eric Tracy of BB&T Capital Markets, which seeks an investment banking relationship with True Religion.

Or the company may be exploring new financing options.

Another possibility: True Religion may set up a partnership with a major apparel maker like Liz Claiborne (NYSE:LIZ), which would hold a majority equity interest in True Religion, while Chief Executive Jeffrey Lubell would retain his 36% stake, says Sterne Agee analyst Ronald Bookbinder, who owns shares in True Religion.

This way Lubell can focus on overseeing the design aspect of the business, which he's skilled at, and at the same time leverage the partner's expertise in sourcing, international distribution and other aspects of the business, he says.

Oh and today Nollenberger Capital downgrades TRLG from buy to neutral. Ouch.

Two days ago LIZ announced it has hired a former pharmaceutical executive to run its business. Ouch (shot of new blood or bad medicine?).

Other TRLG happenings:

Just opened an outlet store in the Desert Hills Premium Outlets near Palm Springs, California.

Seven stores in 2007 planned with 40 to 50 stores over the next three to four years.

Expand into other product categories to be positioned as a lifestyle brand by utilizing existing vendors and through licensing agreements. Examples include fleece, non-denim bottoms, tops, loungewear, footwear, hats, accessories, bags, etc.

Marilyn Much's What's True Religion Up To?


Blogger Bobby said...

Henry -
Have you been down to True Religion's store at 132 Prince Street? I am very curious to see how the store is faring.

12/17/2006 08:13:00 PM  

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