FREMONT, Calif. (AP) -- Men's Wearhouse is buying the Joseph Abboud brand for about $97.5 million in cash in a deal that will broaden the company's roster of exclusive brands.
The news follows the retailer's decision to fire its founder George Zimmer as executive chairman last month. Zimmer is well-known for his guarantee in commercials that "You're going to like the way you look" in Men's Wearhouse fashions.
Men's Wearhouse already has a relationship with Joseph Abboud, who created the brand that bears his name in 1987. Abboud has served as chief creative director at Men's Wearhouse Inc. since December.
The deal is with JA Holding Inc., parent company of the Joseph Abboud brand. Other brands in the transaction include Joseph Abboud Boys, Joseph Abboud Home and Joe Joseph Abboud. It also includes JA's U.S. tailored clothing factory, which has 450 workers.
Abboud-branded products are sold in department stores and specialty stores in the U.S. and more than 50 countries globally. Men's Wearhouse, a seller of men's clothing and accessories, has 1,141 stores.
Men's Wearhouse President and CEO Doug Ewert said in a statement that the Abboud brand offers customers products from an American designer that are made in the U.S.
JA Holding is majority owned by funds affiliated with J.W. Childs Associates LP.
Men's Wearhouse anticipates financing the buyout and its existing $200 million repurchase program with available cash and proceeds from an existing credit facility.
The company has had a busy two months. In June Men's Wearhouse made headlines when it announced Zimmer's firing. While tight lipped on the reasons behind the firing initially, the clothier later disclosed that its board cut ties with Zimmer because he had difficulty "accepting the fact that Men's Wearhouse is a public company with an independent board of directors and that he has not been the chief executive officer for two years."
The Joseph Abboud brand acquisition is expected to close in the third quarter and start adding to Men's Wearhouse earnings in fiscal 2014.
Shares of Men's Wearhouse added 57 cents, or 1.5 percent, to $39.52 in morning trading Thursday, nearing its 52-week high of $39.99 set this past Monday.