After several months of talks, sportswear giant Russell Corp. has acquired Jagged Edge, which will ensure the small technical outdoor brand's survival, SNEWS has learned.
As with Russell's acquisition of the small women's specialty athletic brand Moving Comfort in August, this deal will allow Moab, Utah-based, Jagged Edge to maintain control over marketing, branding, product design and sales, while Russell will lend a stabilizing hand in administration and operations.
The company will remain in Moab, and twin sister founders Margaret and Paula Quenemoen will remain as employees, along with Marketing Director Jordan Campbell and Product Designer Eric Gilmore. One employee, the chief financial officer, was let go since Russell will take over financial duties and accounting.
"We'll still be the face of the brand, the essence of the brand," Campbell told SNEWS. "Now we'll be able to deliver on time. It doesn't change us. It gives us more strength."
"Russell will be our engine," added Margaret Quenemoen, who will now be the company's general manager rather than president and, like the other three, a Russell employee.
The company will now focus purely on wholesale with an emphasis on specialty outdoor, and will eliminate its own unsuccessful web and catalog sales attempts, as well as its retail stores. One store in Telluride, Colo., will remain, having been purchased by Jagged Edge investor and Telluride retailer Susan Dalton in a deal that was final Jan. 2. Margaret said the store will be run like any independent retailer, only it will deal exclusively in Jagged Edge product. She added that the company would allow its retailers to sell via the Internet if they wish. The Breckenridge and Park City stores were closed in the fall, and the company said it expects the Crested Butte store to be taken over by its employees as a general outdoor specialty store.
"We want one business mode, moving in one direction," said Campbell. "We are out of the retail business."
The Chapter 11 bankruptcy protection filed on May 24, 2002, in the U.S. Bankruptcy Court, District of Colorado, is still working through the courts, said Margaret, adding that she expects some resolution in the first quarter of this year. Campbell said the money from Russell's acquisition of the trademark and the brand, free and clear of creditors, will go to the bankruptcy court and be applied to creditors' settlements. Russell declined to reveal the purchase price, which it doesn't have to do as a public company until its 10Q filing later in the year.
The company plans to roll out 30 new styles at the Outdoor Retailer show in late January, in its biggest splash ever and largest booth ever. It also plans products with both eVent and Nextec fabrics. The acquisition should be totally transparent to consumers, with no mention of the Russell ownership on labels, tags or brochures, other than in formal corporate statements.
Russell Corp. (NYSE: RML, www.russellcorp.com), with corporate headquarters in Atlanta, Ga., makes activewear, casualwear and athletic uniforms under the brand names Russell Athletic, Jerzees, Mossy Oak, Cross Creek and Discus. It celebrated its 100th anniversary in 2002.
Long known to many as the source of basic sweats, Russell is looking to expand and update itself with acquisitions such as Mossy Oak (hunting and fishing) and Moving Comfort. It continues to look at other "authentic" outdoor and fitness companies that may be appropriate matches, said corporate spokeswoman Nancy Young.
"We're re-inventing ourselves," Young told SNEWS in December. "Why are we not taking advantage of our heritage?"
SNEWS View: It's been a tough couple of years for Jagged Edge, with a move from its birthplace of Telluride, Colo., in 2001, along with downsizing and trimming staff, then filing for bankruptcy protection in May 2002 after quickly expanded attempts at web and catalog sales floundered, bringing large splashes of red on company budgets. The sale of the brand and trademark to Russell could have saved Jagged Edge from its teeter on the brink of its beloved rock face.
That's not to say that the company is going corporate. In fact, Russell tends to allow its brands to run very hands-off, giving all the administrative and financial help they need and a little parental advice as required, but letting them stay who they are -- a very creative and high-end specialty apparel company. With the song that Russell likely spent to acquire the bankrupt Jagged Edge, the sportswear company really has nothing to lose and everything to gain. Although founding sisters Margaret and Paula are giving up ownership and becoming simple employees, they too have nothing to lose and everything to gain. SNEWS has always liked the Jagged Edge product and looks forward to seeing what the team can do now that it can focus on what the company does best -- turning out well-designed, performance-oriented product.