) has acquired the Latin American distribution business from
Florida-based Bentrani Watches, LLC, the company's largest
third-party distributor. Bentrani has been associated with Fossil
for the past 10 years and has distributed some of the company's
proprietary and licensed brand products in 16 Latin American
countries, including Chile, Argentina, Panama, Colombia,
Venezuela and Uruguay.
With this acquisition, the company expects to gain from
Bentrani's exposure in Latin America, which is one of the
company's fastest growing regions in the world. Financial terms
of the deal were not disclosed.
Besides the distribution business, Fossil has also been
acquiring and developing new brands and licensing agreements to
customer preference and lifestyle. In 2011, the company signed an
exclusive global licensing agreement with Karl Lagerfeld for
watches, which are expected to be launched worldwide in the first
quarter of 2013. Later in August 2012, Fossil completed the
acquisition of privately-held Nevada-based Skagen Designs, Ltd.
and certain subsidiaries, which helped Fossil to expand its
brands in the European markets and other emerging markets of East
Asia, where Skagen has a significant presence.
The continued strength across North American watch business
and Fossil's acquisition of Skagen also boosted its third quarter
2012 earnings, which exceeded both the year-ago earnings and the
Zacks Consensus Estimate by 9.4% and 17.4%, respectively. The
results also exceeded management's guidance range. Top-line
growth, improved margins, increases in comparable store sales and
prudent expense management also contributed to the increase.
Despite robust results, Fossil experienced a rise in costs of
watch components and labor costs resulting in weak gross margins.
Increasing currency headwinds also negatively impacted sales and
gross margins in the quarter. In addition, an uncertain economic
environment in Europe might pose a threat to the expanding brands
in European markets. Fossil currently holds a Zacks Rank #3
(Hold), while its close peer
) carry a Zacks Rank #5 (Strong Sell).
FOSSIL INC (FOSL): Free Stock Analysis Report
GUESS INC (GES): Free Stock Analysis Report
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