OrotonGroup Limited (ASX:ORL) has inked a binding deal to sell its entire stake in Brooks Brothers Australia to Brooks Brothers global. But Oroton’s 2014/15 third-quarter earnings fell by more than $2 million, partly due to sales and margins in Brooks Brothers and Gap – which it also operates in Australia – falling below expectations. Its button-down dress shirts and traditional suits remain a go-to look for American businessmen.
Oroton formed the joint venture in August 2013 in order to develop the brand in Australia and New Zealand.
Oroton will provide management and administration services to Brooks Brothers Australia for up to two years.
Chief executive Mark Newman said the business would now further focus its resources on the core Oroton brand, which had significant potential as the company pursued a repositioning strategy.
Brooks Brothers Group Chairman and CEO Claudio Del Vecchio in a statement thanked Oroton for introducing the brand in Australia and said he planned to further expand Brooks Brothers in Australia after taking full ownership. And in May the company issued a profit warning, saying sales for Brooks Brothers and Gap hadn’t been as good as expected.
The luxury goods group has spent two years establishing Brooks Brothers in Australia with 13 stores and an online store.