The much-rumored deal between
) and Trunk Club has been confirmed. In an agreement entered last
week, the leading fashion specialty retailer has agreed to acquire
the provider of personalized clothing services for men, Trunk Club,
for an undisclosed amount.
The deal is expected to close by the end of third-quarter 2014.
The company plans to disclose the details of the deal in its
second-quarter of 2014 earnings conference call.
Chicago-based Trunk Club was founded in 2009 by its current
Chief Operating Officer (CEO) Brian Spaly. Since its establishment,
the company has registered a significant growth in its business and
expects revenue for 2014 to cross the $100 million mark. Trunk Club
has showrooms in Chicago, Dallas and Washington and is planning to
open its fourth showroom in Las Vegas. The company currently has
over 500 employees of which 250 are professional stylists.
The company offers designer outfits for men as per their style,
fit and size preferences. To avail this service, the customers have
to become a member, which is totally free of cost. Then the
company's stylists talk to the interested members over phone to
enquire about their preferences. The company then sends them a full
box of items and the customers are only charged for those which
they choose not to return within 10 days.
We believe that the recent acquisition strategically fits
Nordstrom's business model. It not only enhances the company's
capability of serving male customers but also expands its online
clothing services for men, in which it invested two years back by
Though Trunk Club has been growing significantly since its
inception, it suffered from the lack of an inventory of branded
items. However, on joining forces with Nordstrom, it will have
access to over 100 brands. Furthermore, we believe that Nordstrom's
271 stores across 36 states and over 1,500 talented personal
stylists will take Trunk Club's business to a new high.
For the past few years, men's clothing business has been growing
tremendously, which has prompted many large retailers to enhance
the segment's square footage in stores as well as introduce luxury
product lines for men. Moreover, this year witnessed the
acquisition of Jos. A. Bank by The Men's Wearhouse Inc. (
), an important acquisition in the men's clothing business.
Therefore, we can understand why the acquisition of Trunk Club
is important for Nordstrom's growth.
Other Stocks to Consider
Currently, Nordstrom carries a Zacks Rank #4 (Sell). However,
other better-ranked stocks in the same industry are Citi Trends,
) carrying a Zacks Rank #1 (Strong Buy) and Abercrombie & Fitch
) carrying a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
NORDSTROM INC (JWN): Free Stock Analysis Report
ABERCROMBIE (ANF): Free Stock Analysis Report
CITI TRENDS INC (CTRN): Free Stock Analysis
MENS WEARHOUSE (MW): Free Stock Analysis Report
To read this article on Zacks.com click here.