Clipper says it has reached an agreement to merge with J Crew, which would create a retail giant with $1.6 billion in sales.
The deal would take Clipper to an estimated $1,800 billion, said Jeff Bewkes, Clipper’s CEO.
The merged company would also have a global presence.
Crew is the leading retail and fashion brand in the world,” Bewke said.
Clipper has been under pressure for years to diversify.
Its business is increasingly in apparel and accessories, and Clipper is no longer focused on being the premier apparel retailer.
In recent years, it has shifted to the apparel industry and expanded its online business, which includes apparel and shoes.
In addition to the $1-billion acquisition, Clippers brands also will have sales of about $400 million a year in the next three years, Bewks said.
The company’s chief executive, James Hirsch, is expected to become CEO of Clipper, Bews said.
Bewkins said the merger will be announced in the coming weeks.
“It’s not the end of the world, but it’s a milestone in terms of our ability to compete with the world’s biggest companies,” he said.
Hirsch will step down as chief executive.
The combined company is expected be valued at $2.6 trillion, BEWKS said.
It will include about $300 million in debt, which Bewokes said could be paid off by selling assets.
Clippings shares rose 5 cents to $7.09 on the Nasdaq on Friday.