Tuesday, Sept. 19, 2000 | 11:33 a.m.
A family owned Las Vegas retail chain is being sold to a Minnesota company, a move that will mean national expansion of a name that's been in the Las Vegas market for 64 years.
Wilsons The Leather Experts Inc. of Brooklyn Park, Minn., plans to acquire El Portal Group Inc. for an undisclosed price. The deal is expected to close within 90 days.
El Portal began life as a single store on Fremont Street in 1936. Since then, the seller of luxury travel products and leather accessories has expanded to 38 stores in the western United States, including 13 in Las Vegas -- but has remained controlled by the family of its founders. The company is expected to record $75 million in sales in the next fiscal year.
Donald Borsack, president and chief operating officer of El Portal, said the deal signals a new wave of expansion of the El Portal name. El Portal will become a separate subsidiary of Wilsons, Borsack said, with all top executives staying on with the company.
"We have a very unique retail specialty concept, but this transaction gives us access to resources so we can expand faster than we could on our own," Borsack said. "This allows us opportunities we may not have had as a family owned business. It gives us the ability to spread our wings nationally and perhaps internationally."
Joel Waller, chairman and chief executive of Wilsons, said the buyout will help broaden his company's market position.
"We believe that, when combined with Wilsons Leather's strong balance sheet and product sourcing abilities, El Portal has the potential to become the nation's leading retailer of premium travel products and accessories," Waller said.
Once merged with Wilsons, Borsack said he sees El Portal expanding to as many as 125 stores across the country within the next several years, with the company remaining focused on its high-end product niche. Ultimately, he said, the El Portal chain could have as many as 300 stores both nationally and internationally.
El Portal currently employs about 500 people, including 200 in Las Vegas. With corporate headquarters remaining in Las Vegas, Borsack said future growth in Las Vegas is very likely after the merger.
"Las Vegas will only prosper from this decision, because the operations will be run out of Las Vegas," Borsack said.
Wilsons operates 555 leather clothing and accessories stores in the U.S., Canada and the United Kingdom. The publicly traded company earned $33.1 million on revenues of $543.6 million in fiscal 1999.
Wilsons said it expects the El Portal transaction to add 15 cents to 20 cents per share to earnings in the year ending January 2002.
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