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RM Williams up for sale

Iconic boot maker RM Williams, is reportedly up for sale, with offers of around $100 million being sought.

RM Williams was founded in 1932 by Reginald Murray Williams, and specialises in boots, bushwear and accessories, with the most successful product being handcrafted riding boots, uniquely made from one piece of leather and stitched up the back. The company still makes many of its boots with hand processes and a single piece of leather.

On a personal note, I own two pairs of exceptionally well crafted RM’s, as they are known, despite not knowing the front of a horse from the back. Apart from my thongs, they are my favourite shoes.

RM Williams now exports to 15 countries and has more than 50 retail stores across Australia and a store each in London and New York. According to the Australian Financial Review, the company generates around $100 million in sales a year, with earnings before interest and tax of around $10 million.

At one stage, RM Williams was listed on the Australian Stock Exchange, but was taken private by Mr Cowley in 2003 after buying out the remaining shareholders, valuing it at around $26 million.

The question is, who is most likely to buy the brand?

Premier Investments (ASX: PMV), the owner of Just Jeans, Jay Jays, Dotti, Portmans and Smiggle, with its $317 million in cash on its balance sheet, could easily afford it, and the company’s management, which include Solomon Lew and Mark McInnes, are renowned as excellent retailers.

Department store retailer David Jones Limited (ASX: DJS) might fancy the chance to integrate RM Williams as one of its exclusive private brands as it looks to raise the percentage of private label sales.

Super Retail Group (ASX: SUL) with its focus on auto, sports and outdoor accessories could be a wild card to make a bid for RM Williams, or we could see someone from left field, such as Kerry Stokes, chairman of Seven Group (ASX: SVW) – who once held a stake in RM Williams when it was listed.

Foolish takeaway

It would be sad to see another Australian icon head overseas, so we’ll be hoping an Australian company takes over the reins at RM Williams.

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More reading

The Motley Fool’s purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead.  This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. Motley Fool writer/analyst Mike King owns shares in David Jones and two pairs of RM Williams boots.

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