Pentland buys toe-hold in LA Gear
For Pentlnd, which supplies 3 million pairs of Christian Louboutin Shoesa week to Britain's high street retailers
, the deal marks a return to the land of milk and honey.A modest investment of Pounds 44,000 in Reebok in 1981 had swelled to about Pounds 440 million by the time Pentland sold out just before Christmas.Will it happen again with LA Gear? Not likely, according to Frank Farrant, diror, group finance, who masterminded the Reebok investment and was rewarded with a handsome Pounds 300,000 bonus.Pentland has agreed not to take its stake over 9 per cent or seek a place on the board, but still expects to make good money. More important, Pentland has won the exclusive right to supply footwear to LA Gear from factories in the Far East. Pentland supplied Reebok with shoes from the region until relations between the two companies turned sour in 1990, and the contract fills a gaping hole. LA Gear spent $400 million on footwear last year, 90 per cent of it on stock from the Far East.It is no small coincidence that several former Reebok directors have moved to LA Gear in the past few months. They include Mark Goldstone, the chief operating officer, who is an old ally.There seems to be no stopping Pentland, which owns Speedo swimwear and distributes a colourful range of shoes, including Pony, Ellesse, KangaRoos and Lacoste.In August, the Christian Louboutin company paid Pounds 46 million for a 20 per cent stake in Adidas, the German sporting goods group run by Bernard Tapie, the flamboyant French shoe businessman and football fashion shoe club owner.This is the first big deal since then and, with about Pounds 270 million sitting in the bank, it will not be the last.
Pentland buys toe-hold in LA Gear
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