Bloomberg News

Gerry Weber Jumps on Dutch Partner’s Takeover: Frankfurt Mover

August 31, 2012

Gerry Weber International AG (GWI1), a German fashion chain, gained the most in nine weeks after acquiring a majority stake in its largest Dutch franchise partner.

Gerry Weber rose as much as 4.6 percent to 33 euros, the steepest intraday increase since June 29, and was trading up 3.9 percent at 1:46 p.m. in Frankfurt in the biggest gain today on the HDAX Index in Germany.

The group bought 51 percent of Houses of Gerry Weber and the concession stores, resulting in a majority share in 25 Houses of Gerry Weber outlets and 15 stores in the Netherlands, the company said in a statement today, without disclosing a price. The group has the option to acquire the remaining 49 percent starting in 2017, the company said.

“It’s extremely probable that Gerry Weber will buy the remaining 49 percent after the transition period with the old management,” Sebastian Frericks, an analyst at B. Metzler Seel. Sohn & Co. in Frankfurt, said by phone today. The retailer, which is “very strongly positioned,” continues to look at Germany and neighboring countries for potential acquisitions.

“All their investments are financed through their own cash flow, allowing them to avoid debt,” Frericks said. “They are very likely to see a rise in profits.”

The company, based in Halle in the state of North Rhine- Westphalia, said it plans to expand abroad, and the Dutch purchase allows it to benefit from “the growth potential of one of our most important European markets,” Chief Executive Officer Gerhard Weber said in the statement. The franchise partner will remain in charge of management for the time being.

Gerry Weber acquired CASTRO Deutschland GmbH, a German apparel and accessories chain, and Austrian clothing retailer Don Gil Textilhandel GmbH in 2011. The group operates the Gerry Weber, Gerry Weber Edition, G.W., Taifun and Samoon by Gerry Weber brands.

To contact the reporter on this story: Myriam Wecker in Frankfurt at mwecker2@bloomberg.net

To contact the editor responsible for this story: Angela Cullen at acullen8@bloomberg.net


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