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Tarrant, Burlington End Talks on Apparel Venture

May 27, 1999|From Bloomberg News

Los Angeles-based Tarrant Apparel Group and Burlington Industries Inc. said they've ended talks on forming a joint venture to make private-label casual clothing because it was more complex and would be less advantageous than first anticipated.

The announcement caused Tarrant's stock to drop 20%. Tarrant designs and contracts the manufacture of private-label brands for retailers. Greensboro, N.C.-based Burlington makes fabrics for clothing and furniture.

TABU Apparel Services, as the joint venture was called, was to make jeans, khaki slacks and other casual clothes. The goal of the venture, which was announced in April, was to help the two companies better meet the demand for private-label garments.

The venture would not provide the "operational synergies" the two companies had anticipated, Tarrant Chairman and Chief Executive Gerard Guez said.

Tarrant shares fell $6 to close at $24.63 on Nasdaq. Burlington shares rose 19 cents to close at $9 on the New York Stock Exchange.

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