This page is temporarily not available. Please check later as it should be available shortly. If you have any questions, please email customer support at firstname.lastname@example.org or call 800-767-3771 ext. 9339.
Texas-based Fossil, Inc. ( FOSL - Analyst Report ) 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 Guess, Inc ( GES - Analyst Report ) carry a Zacks Rank #5 (Strong Sell).
Please login to Zacks.com or register to post a comment.