SAN DIEGO, Nov. 27, 2006 (PRIME NEWSWIRE) -- Sutter Holding Co. (Pink Sheets:SRHI) is pleased to announce that it has completed the acquisition of 100% of the assets of CIC & Company in a stock purchase transaction. Formed in 1999, CIC & Company has developed into the leading children's apparel company in Korea. CIC's premium brands are known for their style and quality and are sold in the leading retail apparel stores in Korea, China and Japan. Stock certificates have been delivered to the Korean shareholders and there are now 45 million shares of Sutter Holding Company outstanding.
The company has also received commitments from its new shareholders to invest $6 million in cash before the year end. The funds will be used as working capital for CIC's clothing line expansion in the United States. Zirk Engelbrecht, Sutter's outgoing Chairman, has also indemnified the company against any claims from any of the previous business that Sutter conducted.
Going forward CIC will be lead by Chief Executive Officer Jung-woo Lee and President Kyung-hoon Ahn. The new incoming Chairman of the Board will be the well-known Korean entrepreneur and businessman, Sung Park. Mr. Park will be joined on the board by U.S. entrepreneur Angelique de Maison. Ms. De Maison will also assist the company in U.S. Market and brand development. They will be joined on the board by Mr. Lee and Mr. Ahn.
The company currently operates "Renoma Junior" brand, which has become the nation's top premium kid's apparel line, expanding to over 50 retail chains nationwide. This growth resulted in profits doubling to over $1 million on revenues of $15.6 million in fiscal 2005.
While CIC & Company is the leader in children's fashion in Korea, its innovative marketing systems enable the company to create solid, long-term relationships with targeted customers through analysis of customer behaviour and state of the art customer marketing tools. These combined factors allow the company to cater to the specific fashion needs of the customer and enable the retailer to provide more advanced marketing and advertising. The Company will utilize already established nationwide distribution channels, logistics and a strong brand marketing system to build upon its multinational apparel business.
CIC plans to continue with the purchase of new brands and expand their international business into new markets. As premium clothing brands are added to their portfolio, CIC expects to continue to improve profitability through manufacturing economies of scale and benefits derived from state-of-the-art marketing approaches.
CIC recently opened their North America Marketing Office in San Diego, CA. CIC intends to expand this location as a base for global marketing and brand expansion.
About CIC & Company
CIC's Retail Division: "Renoma Junior" (premium kid's apparel, French license): This luxurious and modern kid's apparel product line is mainly targeted for 5 to 17 year olds. This product includes formal wear (suits, dresses, and ties), semiformal wears, and accessories (hats, shoes, umbrellas, etc.) lines. Renoma Junior is a leading brand with a complete management system, consisting of its own planning & designing and merchandising & producing, and retail & franchising system. This division has 50 channel distributions all over Korea in major department stores, internet shopping-malls and road shops. Upon its launching, for the first 3 years, the brand generated consistently increasing profit. In 2004, the Company had revenues of $14.2 million (2% net profit) and in 2005, revenues of $15.6 million (7% net profit). The company's growth will be enhanced through active acquisitions of new brands, both domestic and international. Currently, the company is in discussion with leading bands in children's and women's apparel segments. We believe that the Company's value chain will be strengthened through strong synergy effects as these segments shares the same decision makers and buying processes with the Renoma brand. Moreover, internally, the Company could achieve a higher profitability through reaching an economy of scale in operation, resulted from the mergers.
CIMS & IMMS Division (Customer Interaction Marketing Services & Interactive Mobile Marketing Services): This division supports the Company's retail business by providing one-to-one customer relationship management system, and this in turn, will increase customer retention and ultimately improving ROI. Moreover, this division will launch Mobile Interactive Marketing Services with major cellular phone service companies in Korea such as, SK Telecom and KTF. This service not only assists the mobile carriers to enhance their customer base with interactive marketing tools, but also allows for merchants and retailers to utilize a huge database of these mobile carriers. CIC has the proprietary technology and solutions to be a perfect intermediary between these two groups, profiting on ASP service fees and profit sharing fees in some cases. This division is also equipped with a competent management team with strong industry background and marketing networks to penetrate this emerging service market. The company has a plan to replicate this business and service model in other international markets such as China and the U.S. The company is already in discussion with some of the major global mobile carriers and starting to receive positive feedbacks. Besides IMMS (Interactive Mobile Marketing Service) business, this division also has other traditional direct marketing services such as CRM solutions, Data Mining services and other marketing promotion ASP services, versed in marketing tools such as mobile discount coupons. This division already has activated CIC retail brands to a full extent and is ready to move onto national and worldwide clients.
FORWARD LOOKING STATEMENT: This press release contains forward-looking statements, including expected industry patterns and other financial and business results that involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from results expressed or implied by this press release. Such risk factors include, among others: the sustainability of recent growth rates in the market for children's fashion or the apparel industry, grow as anticipated; the positioning of CIC & Company products in the market; ability to integrate acquired companies and technology; ability to retain key employees; ability to successfully combine product offerings and customer acceptance of combined products; general market conditions, fluctuations in currency exchange rates, changes to operating systems and product strategy by vendors of operating systems; and whether CIC & Company can successfully develop new products and the degree to which these gain market acceptance. Actual results may differ materially from those contained in the forward-looking statements in this press release. Neither Sutter Holding nor CIC undertake any obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results.