Markets

How to Grow a Preppy Portfolio: Oxford Industries Buys Lilly Pulitzer

By Lydia Dishman

Updated on: December 22, 2010 / 3:33 PM EST / MoneyWatch

Lilly Pulitzer, purveyor of prepdom's iconic pink and green apparel, is under new ownership. Oxford Industries (OXM) purchased Sugartown Worldwide, Lilly Pulitzer's parent company, for $60 million. With Oxford's concentration in men's wear, this acquisition is an object lesson in strategically diversifying its portfolio.

Atlanta-based Oxford is best known for another iconic resort wear brand: Tommy Bahama. Oxford's CEO J. Hicks Lanier said the company was looking for a "cultural fit" with "shared values, approach to business and vision of how to build lifestyle brands." And what better complement to Bahama's plethora of palm-tree-and-pastel signature prints than Pulitzer's?

Oxford was working on this deal for some time. It approached Lilly Pulitzer's management -- the two entrepreneurs who revived the brand in the early 1990s Scott A. Beaumont and James B. Bradbeer Jr. -- back in January. And just last month Oxford sold off one of its operating groups to LF USA, a subsidiary of Hong Kong-based multinational Li & Fung Limited, the global consumer goods exporter, for $121.7 million.

That tidy sum of cash allows Lanier and company "additional capacity to aggressively develop key lifestyle brands" such as Bahama and now, Pulitzer. Indeed, Oxford was eager to snap up the rejuvenated Lilly Pulitzer which had expanded into bedding, men's wear and stationery under the direction of Beaumont and Bradbeer. 16 stores, a Web site that makes up 45 percent of direct-to-consumer sales, and established relationships with upscale department stores and third-party Lilly Pulitzer Signature outlets no doubt sweetened the deal.

But Oxford's president Thomas Caldecot Chubb III didn't believe Lilly Pulitzer was doing such a great job marketing itself. And Bahama was expanding in similar vertical channels with bedding and furnishings, not to mention fragrance and women's apparel.

Now that the two brands are under the same roof, Oxford can grow them both comfortably using pooled resources, including the expertise of Beaumont and Bradbeer, who are staying on to manage Pulitzer. The future looks as rosy as a surfside wedding at sunset. It probably won't be long before spawn of the two brands starts hitting stores near you.

Image via Lilly Pulitzer