Roots to be acquired by Roberto Cavalli parent company

Canadian outdoor brand Roots Corporation has agreed to be acquired by the parent company of Roberto Cavalli, Marquee Brands, according to a Thursday press release. Shareholders will receive 4.10 Canadian dollars per share, a 36% premium to the stock’s closing price from March 2. The deal aims to keep Roots privately held while maintaining its Canadian heritage.

Leading the strategic partnership is Marquee Brands CEO Heath Golden, who expressed excitement about the honor of taking on Roots and the opportunity to expand the brand globally while staying true to its distinctive character. JM&A Design and Development, partnered with Marquee Brands, will manage the day-to-day operations of Roots, handling design, production, distribution, and retail/e-commerce activities across Canada and the U.S. This includes managing the roots network of over 100 North American retail locations.

Roots initiated a strategic review in March, leading to various acquisition proposals. The newly acquired entity will join Marquee's existing portfolio, which includes brands like Sur la Table, Laura Ashley, and BCBG. In 2020, Roots' U.S. subsidiary filed for Chapter 7 bankruptcy, closing seven stores. Since then, the company has implemented a multiyear turnaround strategy, including the closure of underperforming stores.

In the latest quarter, Roots reported total sales of CA$42.6 million, a 6.5% increase from the previous year, with comparable sales growing by 3.2%. However, the net loss expanded to over $10 million, a 27% increase compared to the year before.