American Premium Water Corporation (OTC Pink: HIPH) is engaged within the research, development, production, and marketing of premium consumer goods. The company maintains two businesses: LAlpina and Gents.
The company just announced a 1,134% increase in sales over its previous quarter 2017 and 80% reduction in debt.
See the full release here.
This outstanding performance is attributable to the Gents acquisition, in Q3, while also working hard to significantly reducing long-term convertible debt and increase shareholder value.
Gents is a luxury lifestyle brand, which offers fine apparel, hats and accessories. Gents products can be found at high-end retailers such as: Bloomingdale’s, Saks Fifth Avenue, Nordstrom, Inc. (NYSE: JWN), and online.
Gents recently entered into a licensing agreement with American Premium Water Corporation (OTC Pink: HIPH). The partnership provides American Premium Water Corporation (OTC Pink: HIPH) with multimillion-dollar revenue capabilities, as well as distribution and marketing networks.
“There’s a lot of natural synergy between Gents and Lalpina. We share a connection with celebrity and lifestyle, and Gents has the right infrastructure and retail distribution network that Lalpina will now utilize. So we’re not only adding significant top-line revenue to the company, but a first-rate management team as well,” details American Premium Water Corporation (OTC Pink: HIPH) Chairman and Founder Al Culbreth.
American Premium Water Corporation (OTC Pink: HIPH) has a market cap of just $1,250,303, as of year end 2017. Furthermore, the company maintains a share structure consisting of just over 64 million shares outstanding.
Apparel Investing: How To Get The Biggest Bang
Large U.S. apparel companies have struggled in 2017, as the overall retail sector continues to face disruption from ecommerce and changing consumer habits. While the selloff may seem to be a buying opportunity for the larger retailers, investors should dig deeper into the fundamentals to avoid value traps. Large-cap retail and apparel companies may have greater brand awareness than their smaller competitors, but full saturation, lack of innovation and slowing growth continue to dim their outlook.
American Premium Water Corporation (OTC Pink: HIPH) is one small-cap apparel company that may prove to be a viable acquisition target for a larger corporation that is looking to re-jumpstart growth. The company owns and operates the high-end apparel brand, Gents, which is available across numerous luxury retails such as Saks Fifth Avenue, Bloomingdale’s, Nordstrom, Inc. (NYSE: JWN), and more. Here are three large-cap apparel companies that could benefit from acquiring American Premium Water Corporation (OTC Pink: HIPH):
Gap, Inc. (NYSE: GPS) operates as a casual apparel & accessories retailer. The company operates four main businesses: Gap, Banana Republic, Old Navy, and Athleta. As of November 2017, Gap, Inc. has a market cap of $11.62 billion and a share structure consisting of 392.16 million shares outstanding with a float of 236.63 million. During the company’s latest fiscal quarter ending on July 29, 2017, Gap, Inc. reported total revenue of $3.8 billion and net income of $271 million.
The Gap, Inc. has seen lack luster revenue results throughout the first two fiscal quarters of 2017. During the fiscal first, Gap, Inc. reported year-over-year revenue growth of 0.06%. However, revenue growth slipped 1.35% during the second, compared to the same period last year. When comparing the first two quarters of 2017 to its historical average revenue growth of 3.31%, the Gap, Inc. appears to be on a sales decline.
Abercrombie & Fitch Co. (NYSE: ANF) is engaged as a specialty retailer that offers a wide array of apparel, personal products, and accessories for the teen market. The company operates well-known brands, such as: Abercrombie & Fitch, Hollister, Gilly Hicks, and more. Abercrombie & Fitch Co. has a market cap of $1.14 billion, 68.09 million shares outstanding, with a float of 67.6 million as of November 2017. During the company’s latest fiscal quarter ending on July 29, 2017, Abercrombie & Fitch Co. reported total revenue of $779.32 million and a net loss of $15.49 million.
Abercrombie & Fitch Co. continues to see revenue growth slide, as the company continues to try to revamp its business and image. During the first quarter of 2017, the company saw revenues decline 3.56% compared to the same period last year. Furthermore, fiscal second quarter revenues skid 0.49% compared to the second quarter last year. Historically, Abercrombie & Fitch Co. has a strong year-over-year revenue growth rate of 5.37%. However, the company has continued to see revenue growth slip over the past five years. Management has failed to innovate and diversify the business away from its lackluster teen apparel brands. Abercrombie & Fitch Co. could benefit greatly from acquisition of the Gents brand through American Premium Water Corporation (OTC Pink: HIPH), which would diversify its apparel holdings into the luxury market.
The Buckle, Inc. (NYSE: BKE) is engaged as a casual apparel retailer, which develops a line of clothing, sportswear, footwear, accessories, and more. The company gears its product line to young men and women. As of November 2017, The Buckle, Inc. has a market cap of $1.12 billion and maintains a share structure consisting of 48.22 million shares outstanding and a float of 27.74 million. During the last fiscal quarter ending on July 29, 2017, The Buckle, Inc. reported total revenue of $195.65 million and net income of $11.48 million.
The teen apparel retail space can be susceptible to greater volatility than the rest of the market. Most teenagers do not have the ability to pay the sky-high price tags that teen fashion retailers demand. Also, teenagers may be more likely to feel peer pressured to where they shop in order to look “cool.” The Buckle, Inc. is one such teen retailer that is seeing a steady revenue decline over the past several quarters. During the company’s first fiscal quarter, revenue growth was down 12.85% from the same period in 2016. The second quarter saw revenue growth continue to decline, down 7.78% from a year ago. The Buckle, Inc. desperately needs to find a way to plug the sinking ship. Diversifying into a parallel market geared towards a slightly older audience than its current target could allow the company to see revenue growth stabilize and change direction. American Premium Water Corporation (OTC Pink: HIPH)’s Gents brand is a perfect acquisition candidate for The Buckle, Inc., as it would allow the company to diversify its business away from the sinking teen apparel market.
Gents Makes Enticing Acquisition Target For Apparel Branding and Wholesalers
American Premium Water Corporation (OTC Pink: HIPH)’s Gents subsidiary would be a great target for other apparel companies outside of retail, such wholesalers. Unlike their retail counterparts, wholesalers are the actual suppliers of the consumer goods. Rather than worrying about foot traffic and same store sales, wholesale apparel companies focus on providing their clients with top quality merchandise at the most competitive prices.
Wholesale apparel companies would greatly benefit from acquiring the Gents luxury apparel business from American Premium Water Corporation (OTC Pink: HIPH). Here are two specific wholesale apparel companies that could be potential takeover suitors:
V.F. Corporation (NYSE: VFC): The branded wholesale apparel company may not be a household name, but it supplies some of the most well-known clothing and accessory brands: The North Face, Vans, Timberland, JanSport, Reef, Lucy, Wrangler, Lee, and more. Furthermore, the company offers official licensed apparel under NFL, MLB, Harley-Davidson, Majestic, and more. As of November 2017, V.F. Corporation has a market cap of $28.99 billion and a share structure consisting of 395.15 million shares outstanding and a float of 391.21 million shares. During the company’s latest fiscal quarter ending on September 30, 2017, V.F. Corporation reported total revenue of $3.51 billion and net income of $386.14 million.
PVH Corp. (NYSE: PVH): The luxury apparel wholesale company is engaged within the designing, marketing, and distribution of men’s, women’s apparel and accessories. Furthermore, the company distributes some of the biggest names in luxury fashion: Kenneth Cole, Michael Kors, Tommy Hilfiger, Calvin Klein, Van Heusen, Geoffrey Beene, IZOD, Sean John, and more. As of November 2017, PVH Corp. has a market cap of $10.44 billion and a share structure consisting of 77.42 million shares outstanding and a float of 77.19 million shares. During the latest fiscal quarter, PVH Corp. reported total revenues of $2.07 billion and net income of $119.7 million.
At first glance, Gents seems to be a perfect fit for PVH Corp., as the wholesaler primarily focuses on luxury branded apparel. V.F. Corporation would still make a great home for Gents, but the company takes on a more diversified distribution approach than its competitor.
Overall, the company’s Gents acquisition gives the company a chance to be a major acquisition opportunity for larger, lagging apparel companies. Utilizing the Gents brand, distribution and marketing network, American Premium Water Corporation (OTC Pink: HIPH) will then be able to develop a similar structure for its LALPINA brand. Overall, the company is positioned within two strong growth industries that will continue to be in robust demand.