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There Goes That Theory

Owners of fashion brand sell it to Japanese business partner

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Andrew Rosen and Elie Tahari, owners of Theory LLC (New York), the fast-growing contemporary fashion brand, today announced the sale of the company to Japan-based Link International, Theory's current Japanese licensee and manufacturer, in partnership with Fast Retailing Co. (Tokyo).

Fast Retailing is the company behind the Uniqlo brand of casual clothing and operates over 590 retail stores in Japan. Link has, since 2000 under a license agreement with Theory, operated 38 shops under the Theory name, 13 shops under Theory for Men and 24 shops under other brands and outlets in Japan. Link also operates two shops in Hong Kong.

Under the terms of the deal, Link International and Fast Retailing will each own 44.5 percent of Theory LLC. Rosen will hold an 11 percent interest. Tahari will no longer be a shareholder. Rosen will continue as president and coo, retaining an equity interest. Ricky Sasaki, of Link, has been named chairman and ceo.

“My long term objective has always been to build a global brand,” said Rosen. “This sale enables us to combine our American and Japanese interests into one unified company, leveraging the assets of Fast to realize a worldwide Theory business.”

“We see attractive growth potential in Europe and Asia,” said Sasaki, “further growth in the U.S. and Japan and the potential for new product lines in the future.”

The deal will aid Fast Retailing in diversifying beyond its existing casual clothing business in Asia. Fast views this transaction as its first step into the U.S. market.

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Theory was founded by Rosen and Tahari in 1997. The team licensed Theory to Sasaki and Link International to build distribution in Japan. Theory's American and Japanese businesses combined produce over $200 million in sales per year. In the U.S., the brand has been distributed through Saks Fifth Avenue, Neiman Marcus, Bergdorf Goodman, Barney's, Bloomingdale's and high-end specialty stores; and in Europe, through Harvey Nichols, Selfridges and Harrods in the U.K., Bon Marche in France and Theresa in Germany.

In the last year, Theory has opened freestanding stores in New York, Southampton, N.Y., Greenwich, Conn., Boca Raton, Fla., Philadelphia and San Jose, Calif.

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