The fashion-merger trend continues….

Right on the heels of last month’s acquisition of Enyce by Liz Claiborne for $114 million, Kellwood Co. ( announced on Thursday that it is buying Phat Fashions for $140 million. The hip hop—inspired clothing brand, which includes the men’s label Phat Farm ( and the women’s line Baby Phat (, will be added to Kellwood’s existing list of labels such as Calvin Klein and Izod.

The founder of Phat Fashions, Russell Simmons, said that the Kellwood-Phat Fashions merger would give him the resources to transform his brand into a "mainstream staple."

Kellwood Co.’s motivation for acquiring Phat fashions is to diversify its brand holdings and enter the urban lifestyle market, a sector that is said to account for $10 billion in consumer retail sales annually.

The deal is expected to close in early February. Kellwood’s own production of the Phat Farm collection will commence for the fall 2004 season.

Future plans include a higher-end Baby Phat Collection, intimate apparel for Baby Phat, and the possibility of a Phat Farm inspired car. Baby Phat now makes up $70 million in revenue out of Phat Fashions’ total revenue of more than $260 million.

Simmons will continue on as chief executive of Phat Fashions and his wife, Kimora Lee Simmons, will continue to direct the Baby Phat line.

(From WWD, Reuters and other sources)

— Elissa Silver Weinberg