New York based leading private label women's career & casual apparel manufacturer Cygne Designs Inc announced it has acquired the branded and private label denim apparel business of Commerce Clothing Company LLC, a privately-held company principally owned by Hubert Guez. During 2004, Commerce Clothing re-entered the market as a designer, merchandiser, and manufacturer of denim apparel with sales to retailers located in the United States.
Commerce Clothing had audited net sales of $17.26 million for the seven months ended December 31, 2004 and unaudited net sales of approximately $33 million for the six months ended June 30, 2005, and anticipate that it will be profitable in both periods. The purchase price consists of (a) $3,750,000 in cash, (b) 10.5 million shares of Cygne common stock and (c) a subordinated secured promissory note of $47.5 million with a maturity date of April 30, 2012 at an annual interest rate of 4.7 percent, compounded annually.
In addition, Cygne has entered into a Supply Agreement and a Distribution Agreement with companies controlled by Guez, and a five-year renewable non-compete agreement with Guez. In connection with this acquisition, Cygne has entered into a Factoring Agreement with Milberg Factors, Inc. Following this acquisition, Cygne has 22,958,038 shares of common stock outstanding. Full details of this transaction will be contained in the Company's future regulatory filings.
Cygne Designs Inc is a manufacturer ofprivate label women's career and casual apparel with sales to retailers and wholesalers located in the United States.
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