Blair agrees to be acquired in a $174 million cash deal

Appleseed`s Topco Inc., a company owned by investors Golden Gate Capital, plans to buy apparel and home products retailer Blair Corp. in a cash deal worth $173.6 million, or $42.50 per share, Blair announced today. Blair had reported last Friday that Appleseed’s/Golden Gate had made an initial offer at $37.50 a share.

Blair will operate as a wholly-owned subsidiary of Appleseed`s, one of the largest direct marketers of women`s apparel in the country. After the merger, the combined entity will have annual revenue of over $1.1 billion, the company reports.

Blair’s board approved the deal unanimously this morning. The price represents a 23.6% premium over the prior four weeks` average closing price of Blair`s common stock.

"After careful consideration, in conjunction with our independent advisors, we have concluded that this transaction is in the best interest of our shareholders," says Craig Johnson, chairman of Blair, No. 95 in the Internet Retailer Top 500 Guide to Retail Web Sites. "This transaction, which will make Blair a private company, will provide greater resources to accomplish the Company`s long-term goals."

"We have targeted this segment of the women`s specialty market because it is one of the fastest growing demographic segments of the population—women over 50 years old,” says Stefan Kaluzny, managing director of Golden Gate Capital. “The acquisition of Blair, a marquee brand in this space, significantly strengthens our portfolio and provides us scale and purchasing power that none of the companies has had individually. We are very pleased that the Blair board has unanimously approved this agreement. Blair will be a welcome addition to our family of leading women`s apparel brands."

Golden Gate Capital has been one of the most active investors in the women`s specialty retail market, with an emphasis on the direct channel. Its portfolio includes Spiegel, Newport News, Appleseed`s, Draper`s & Damon`s, Norm Thompson and Haband.

The transaction, which is anticipated to close this spring.

Blair’s vice president of marketing Jeff Parnell, is speaking at Internet Retailer Conference & Exhibition, June 4-7 in San Jose, in a session June 5 entitled “Making E-Retailing Music: When IT and Marketing Harmonize.”