Marquee Brands reached north of the border for its latest addition.
Late Thursday, the New York-based brand management firm finalized a deal to acquire Roots, the Canadian retailer and one-time Olympic outfitter, for 4.10 Canadian dollars a share in cash, a 36 percent premium over the close on March 2, the day the company said it was seeking a strategic partner.
The deal was completed through Marquee’s operating partner, JM&A Design and Development Inc., a company led by veteran Canadian retailers Joseph Mimran and Frank Rocchetti. Mimran is known for heading Joe Fresh, Club Monaco, Kit & Ace and other popular brands.
Roots shares closed at 3.69 Canadian dollars a share on the Toronto Stock Exchange on Thursday before the deal was announced. A special shareholders meeting will be held to approve the transaction.
You May Also Like
When the deal is completed, it will result in Roots being taken private.
“Taking on Roots is an incredible honor, and our strategic partnership with JM&A ensures the brand remains anchored in Canadian culture,” said Heath Golden, chief executive officer of Marquee Brands. “With that foundation in place, we see significant global opportunity to extend Roots into new categories, markets and consumer segments, while remaining true to all that makes the brand distinctive.”
As Roots’ main operating partner, JM&A will oversee the design, development, manufacturing and distribution of men’s and women’s apparel and will also assume responsibility for the company’s 100-plus stores as well as its e-commerce operations across Canada and the United States. Marquee stressed that as a result of this structure, the brand will remain in Canada, guided by Canadian operators who understand the customer, Roots’ 53-year heritage and its place in Canadian culture.
“Few brands are as deeply connected to Canada’s identity as Roots,” said Mimran, president and creative director of JM&A. “The opportunity is to build from that strength with renewed focus on product, merchandising and the customer experience, while remaining true to the character that has made Roots so distinctive. Frank and I look forward to leading the business from Canada in partnership with Marquee Brands and positioning the brand for its next phase of growth.”
“This transaction is a strong endorsement of the Roots brand and the momentum behind our business,” said Meghan Roach, president and chief executive officer of Roots. “Over the past several years, we have restored Roots to a position of strength, with a distinctive Canadian identity that resonates with customers here and around the world. This transaction brings together Marquee Brands’ global brand-building platform and JM&A’s operational leadership to position Roots for its next chapter of growth. Roots remains proudly Canadian, and we are excited to build on our heritage and pursue the significant growth opportunities ahead.”
In an exclusive interview with WWD, Golden said Roots is a “beloved” brand that ticks all the boxes for its customers and for Marquee. That includes a strong omnichannel presence, a healthy Taiwan business operated by BLA, a division of Li & Fung, a focus on healthy outdoor activities and a strong, comfortable product assortment. Roots operates two stores in the U.S. and also has an e-commerce presence here.
“That’s a wonderful starting point for growth,” he said. “When people love a brand, it allows you to take more share.”
He said when the company revealed it was seeking strategic partners this spring, “we jumped on it. We love all of our other 23 brands, but we’re really excited about this one.”
Golden said that while Roots already has licenses in home and other products, he sees expansion opportunities in other categories such as footwear, camping products and “experiences.”
Roots was founded by Michael Budman and Don Green, who met at a summer camp in Canada’s Algonquin Park. Together, they created Roots in 1973. The company sold a majority stake to Searchlight Capital Partners, a private equity firm, in 2015. It went public on the Toronto Stock Exchange in 2017.
Searchlight, Kernwood Limited and all directors and senior officers of the company, a group representing about 69 percent of the total voting interest, have entered into agreements to vote in favor of the transaction.
Among Roots’ hits over the years were its “negative heel” shoe, the Sport Root, where the heel sits higher than the toe, and its Salt & Pepper Sweats made from premium fleece. Its varsity jacket, introduced in 1979, continues to be popular, along with the brand’s leather goods. The brand, which had outfitted the Canadian Olympic teams several times over the years, is also known for its beaver logo, a symbol of Canada.
Since opening its first store in Toronto in 1973, the company has expanded into a wide range of active- and outdoor-inspired products for men, women and children.
Marquee has been active on the acquisition front of late. In May, it bought control of Roberto Cavalli and before that, it purchased Stance, the sock and basics brand.
Marquee was established by Neuberger Berman in 2014, works with some 300 licensees and has experience converting brands to a licensing model. Industry veteran Heath Golden is chief executive officer of the company, which also owns Martha Stewart, Laura Ashley, America’s Test Kitchen and Isotoner, among other brands.
