Rivers asked women’s label to buy it out

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The boss of the family owned Rivers clothing brand called Australia’s biggest women’s fashion retailer asking to be bought out.

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The 28-year-old Rivers shoe and apparel brand has been sold for $5 million to Specialty Fashion Group, which has the Katies label in its portfolio.

Specialty’s chief executive Gary Perlstein said Rivers’ sole director Philip Goodman’s advisers called his company offering to sell the business.

“It’s one of those rare and fortunate circumstances where there was a motivated seller,” he told AAP.

“We got a phone call and as a result we were able to achieve what we think is a very good value acquisition price.”

Mr Perlstein said Rivers was not sold cheaply because of debt problems.

“In a transaction … you negotiate hard, you extract the value you believe is appropriate,” he said.

Specialty Fashion Group says it plans to expand the number of Rivers Australian stores from 160 to 220.

The news saw Specialty shares gain four cents, or 5.1 per cent, to 83 cents.

Specialty will invest $4 million into the Rivers business by the 2014/15 financial year to improve its performance.

Rivers is not expected to make a contribution to Specialty’s earnings until that time.

Specialty has a customer database of seven million while Rivers has an estimated base of several hundred thousand.

The fashion group says it will achieve significant costs savings of $10 million on an annualised basis by fiscal 2015, which Mr Perlstein said would occur in the logistics area.

“That’s by leveraging volume around the country,” he said.

Rivers revenue for fiscal 2014 is estimated at $180 million.

Earlier this year, Rivers signed an accord after it was revealed to have used Bangladeshi sweat shop labour to make garments in unsafe and intimidating conditions.

Specialty Fashion Group had also signed an accord on labour standards in Bangladesh, which ensures internal audits are conducted.

“That will give us the comfort that we need that we apply to our business,” Mr Perlstein said.

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