- Sara Ehlers |
It's been a financial struggle for Joe Jean's this year. Los Angeles-based denim company recently disclosed that they were hoping to approve a reverse merger for the company.
In January, the company will hold a stockholders’ meeting to approve a reverse merger that will transition the company into the Differential Brands Group, according to Apparel News. The denim company will then be traded on the Nasdaq.
The company plans to hold a stockholders’ meeting in January 2016 to approve the reverse merger. The meeting will ask stockholders to approve a 1-for-30 reverse stock split, where stockholders get 30 shares in the new company for every one share of Joe’s Jeans. According to Apparel News, the meeting will also create a new board of directors for the company with Joe’s current board members: Sam Furrow, Joanne Calabrese, Kelly Hoffman, Suhail Rizvi and Kent Savage.. Major stockholders of the company include Joe Dahan, former creative director of Joe’s Jeans, and founder and CEO of Hudson Peter Kim. Together, the two own over 20 percent of the company’s stock (Dahan owns 17.3 percent and Kim owns 10.6 percent). The reverse merger will also put Michael Buckley in charge as the chief executive group of the Differential Brands Group, which will completely overtake the Joe’s Jeans brand.
Joe’s Jeans to hold stockholders’ meeting to decide new board members
The reverse merger comes after the company’s declared financial issues. In September, the premium denim wear brand completed a deal with Sequential Brands Group in order to gain proceeds to pay off outstanding debts. As part of the deal, the brand’s blue jeans label Hudson merged with high-end brand Robert Graham. The two labels will be combined into the Differential Brands Group, as reported by Apparel News.
This was the company’s solution to opting out of bankruptcy. Joe’s Jeans was sold to Sequential Brands Groups and Global Brands Group Holding for 80 million dollars. Joe Jean’s was reported to start having financial problems in 2013 after acquiring the Hudson brand. The company took out a loan for 90 million dollars in order to buy the jean label for 97.6 million dollars. Also, in addition, one of the company’s prime Los Angeles stores also closed earlier this year mid-summer. The company owed approximately 59 million dollars in debt prior to the store closure and acquisition deal. Luckily, the deal allowed the company to pay off some owed loans.
Photo: Joe's Jeans