NEW YORK, Oct 3, 2002/ -- It's finally official: Liz Claiborne announced Monday that it has acquired Ellen Tracy.

The $180 million deal, which includes assumed debt, has been rumored for quite some time and the federal government gave its blessing to the merger earlier this month.

A recent buying spree has seen Liz Claiborne bring brands as diverse as Laundry by Shelli Segal, Lucky Brand Dungarees, several DKNY divisions and the Kenneth Cole apparel license into its stable.

Founded in 1949, Ellen Tracy is a leader in the bridge sportswear market and posted sales of about $171 million in 2001.

Its labels are Ellen Tracy, Inc, Linda Allard Ellen Tracy and Company Ellen Tracy.

Founder Herbert Gallen, 86, has remained at the helm of the company for more than 50 years, and will stay on as chairman under the new Liz Claiborne leadership.

"The timing is right, but more importantly, the fit is right," said Gallen of the merger. "I am confident that the sale to Liz Claiborne Inc. will ensure Ellen Tracy a prosperous future for the next 53 years."

The successful Liz Claiborne deal ends speculation that Gallen would be reluctant to let go of the company he has played such a hands-on role in building.

Six years ago, Boston-based Bain & Co. almost bought Ellen Tracy, but Gallen pulled the plug on the transaction in the final hour.

Linda Allard, Gallen's wife, will continue in her role as Ellen Tracy's design director.

Glenn McMahon, formerly president of Kenneth Cole Women's Sportswear, will become president of Ellen Tracy, responsible for the day-to-day management of the business.

Lydia Gollner will step into McMahon's old shoes at the head of Kenneth Cole's women's sportswear division. She was previously vice president of sales and merchandising for the Kenneth Cole women's division.

"The acquisition of Ellen Tracy is consistent with our portfolio strategy, adding further diversity by increasing our presence in the bridge sector," said Liz Claiborne Chairman and CEO Paul Charron in his statement Monday. The company's current bridge offerings are in its Dana Buchman division.

Charron continued: "In addition to continued growth of the core Ellen Tracy lines and expansion of the casual Company Ellen Tracy line, we feel there are abundant line extension opportunities in non-apparel categories, as well as in company-owned retail stores and international distribution."

Ellen Tracy currently has licensing agreements for footwear, eyewear, hosiery, leather outerwear, belts, scarves and fragrances, and sells primarily to select specialty stores and upscale department stores.