Thursday, February 17, 2011

Industry Thoughts | Private Equity and Fashion Week

Yikes, sorry for the delay in posts, guys. With our clients keeping us ridiculously busy coupled with lots of deal flow, it's been tough to get a chance to put in a post. Luckily, the wonderful week of color, style, and design known as Fashion Week came to New York, but it didn't slow down deals either.

More importantly, during Fashion Week, two fashion houses were acquired by PE firms: Sun Capital Partners (through Kellwood Co.) acquired Rebecca Taylor, and Castanea Partners acquired Donald J. Pliner. It's no surprise which firms ended up buying the storied houses; Sun Capital has a strong consumer division and Castanea happens to own a few other recognizable fashion labels, including Urban Decay, Ippolita, and Betsey Johnson.
Also, take a look at the WSJ's blog Private Equity Beat on a post-deal interview with Castanea partner Troy Stanfield on Donald J. Pliner.

Fashion and luxury apparel are popular sectors with PE. Margins are very high, brand reputation is getting stronger, and it's not difficult to grow a label if you have the right team behind the brand. Many fashion labels have been PE-owned before, including:
  • Stuart Weitzman (Irving Place Capital at one point)
  • Jimmy Choo (TowerBrook Capital Partners)
  • Harry Winston (Fenway Partners at one point)
  • Rafaella (Cerberus at one point)
  • J. Mendel (The Gores Group)
It's always exciting to me when a recognizable consumer goods company is acquired by a private equity firm, as brand strength and reputation are powerful keys to a company's growth. It'll be interesting to see if more fashion houses are on the way to going to buyout shops.

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