LBU INC. ACQUIRES BERNARD MANUFACTURING COMPANY

LBU Inc. a privately held bag manufacturer in Passaic, NJ, acquired Bernard Manufacturing Co., a producer of totes, backpacks and other bag-related accessories under the auspices of Bernard Cap Company Inc.

The cash deal allows LBU Inc. to gain possession of Bernard Manufacturing Co.'s material inventory, overseas merchandise, its California warehouse, the machinery and equipment. In addition, Bernard Manufacturing Co.'s sales team, including Vice President of Sales Mary Jo Welch, will be joining the LBU staff.

Larry Weinstein, CEO of Bernard Cap Company Inc. – a six generation family-owned business – says the two parties were brought together by mutual acquaintances. The military headwear supplier wanted to divest itself of its ad specialty division.

"The recognition of the fit was almost instantaneous," Weinstein says of his first encounter with LBU Inc. Bernard Cap Company Inc. started selling bags in the early ‘90’s to supplement its headwear sales, which suffered a setback when the government decreased the size of the military.

In recent years, however, promotional bag sales have accounted for a quarter of Bernard Cap Company Inc.'s total revenue, which prompted the supplier to sell that division. The Headwear accounts for 75 percent of the company's annual revenue in ’06 and ‘07. "It just made so much more sense to use our resources to focus on our core competency," Weinstein says.

LBU Inc. president Jeffrey Mayer sees the acquisition as an asset to his company, which now has access to a 75,000 square-foot facility in Los Angeles. Mayer says that before the addition of the warehouse, "we would always give all of the stock business to our competitors because we would make everything from scratch, and we couldn't compete. Now we have an in-house inventory of more than 300 styles of bags that we can ship within 48 hours."