Another specialty apparel player is Columbia Sportswear Company (NASDAQ: COLM), and it has bought brands. With a $1.7 billion (or close to it) market cap, it would not be a huge target but the company has been an acquirer.  It seems likely that it would prefer to be a buyer rather than a seller, at least if history is any indicator.

There had been a longer-term belief that ultimately a Warnaco and Phillips-Van H
eusen merger could come over the old Calvin Klein ties.  That can now probably be written off.  That is why Warnaco Group Inc. (WRC) shares are down 1.6% at $46.67 in mid-day trading.  Still, a reaction of 1% or 2% is not even as critical as a reaction based upon a key analyst call.

Phillips-Van Heusen has the Calvin Klein licensing segment, IZOD, BCBG, and many more.  Now you can add Tommy Hilfiger to that lineup.  The apparel industry goes through waves of consolidation from time to time.  Today’s $3 billion deal is going to have many speculating or looking to see which brands could be gobbled up next.  The problem is that this $3 billion deal may have taken a natural predator off the market for smaller brands for years.

It seems that most of the companies here are either more probable buyers of smaller companies or are deals which may have come and gone.  If you have seen anything out there, the most obvious is to never be overly surprised when companies do deals.  If shareholders of PVH would have known on Friday that the company was going to announce a deal larger than itself to make an acquisition, the gut reaction would have probably been to expect a sell-off.  Meanwhile, its shares are up.

So far we are not seeing reactions that are indicative of a wave of deal making.  We’ll be looking at some of the smaller and more vulnerable brands out there over the coming days.

JON C. OGG