NEW YORK — Jones Apparel Group has acquired a 50 percent stake in Rachel Roy, giving the $3.85 billion apparel giant a long-desired entry into the high-end contemporary market and providing the small design house with vital operational backing.
The fashion company's founder, Rachel Roy, will continue to design and produce the line, with the same 18 employees, in her showroom at 148 West 37th Street here and in the same factories. But with financing from Jones, the three-year-old label will be able to expand beyond its current collection into additional categories, with possibilities including fragrance, footwear, accessories, home and — closer to the designer's heart — a more affordably priced line. Expanding globally and opening freestanding stores are also on the to-do list.
"So many different areas of growth excite me," Roy said. "Having a partner like Jones that is willing to support us is like getting a big brother or family member."
The deal creates a three-way venture between Rachel Roy, Jones and TSM Capital, which acquired a significant minority stake in Rachel Roy in November. Jones will assume operations of the existing designer collection business under license and also will market the line.
Jones, a predominantly mainstream vendor that owns Nine West and Anne Klein, has been looking to invest in the contemporary arena for years, but the high multiples that hot market had demanded were cost prohibitive.
The terms of the deal were undisclosed, but "there wasn't a big exchange of money here," said Jones chief executive officer Wesley R. Card, "but we all have a share in the potential upside of this business."
The result is a lot of industry veterans focusing their attention on the young line. On the side of the Roy company, there is the designer herself and her husband and co-founder, Damon Dash, as well as Stephen L. Ruzow, who has been consulting for the brand. From TSM, there are co-founders Marvin Traub, Mortimer Singer and Aslaug Magnusdottir. From Jones, Susan Metzger, ceo of Jones' women's wholesale sportswear division, will be responsible for the operations of the business.
"When I first got into designing Rachel Roy, I was given this platform by Damon to work on my dream," said Roy, who started her career as an intern at Rocawear. "And no matter how hard I worked, I loved it and never felt the pain — Damon felt all of that."Her husband rubbed his jeans pocket and said, "Wallet shock," shaking his head.
Card rubbed the pocket of his own suit pants instinctively and joked, "I'm worried now."
Roy joined Rocawear fresh out of college, and rose to become creative director of Rocawear's women's and children's lines. While at Rocawear, where she met her husband, she launched her own label in spring 2005. When they both left later that year, the couple kept ownership of the Rachel Roy business, which was initially launched as a contemporary collection before changing tiers to become a young designer line with prices about 40 percent higher.
"Rocawear was a quick flip for me, but we couldn't exploit this brand," Dash said. "We had to protect it."
Retailing from about $650 to $2,995, sources put the collection's sales volume at around $10 million. The line is sold in more than 60 doors in the U.S., including Bergdorf Goodman, Neiman Marcus and Saks Fifth Avenue, and 40 doors worldwide, making international more than a fifth of the company's business. Door expansion, particularly globally, will be one of Jones' first priorities.
"In only about three years in the design business, Rachel has made a great business," Traub said. "Having a partner like Jones will bring it to the next step. It can be as big as a major global design business can be."
Although Dash is campaigning for a men's line, Roy, who just gave birth to a daughter a month ago, vetoed that idea as "last on the list." The closest category expansion to Roy's heart is creating a more affordable collection — one of Jones' specialties. Roy said she plans to use the vendor's resources to research and decide what segment of the market will be the best point of entry for a diffusion line.
"There's a whole world of women who love fashion and it should not be exclusive to women who can afford a $1,500 dress," Roy said. "A lot of my life I couldn't afford to spend that, and my friends and family still can't."
Roy said that after her first appearance on "Oprah," she received about a million e-mails."A lot were positive, but a lot said how they couldn't afford it," the designer recalled. "The second time I went on, I didn't even talk about the product because most of the audience couldn't afford it. There was such a disconnect, which I felt was unfortunate. It's really important to me to make a line more women can afford, but just as important is doing it right."
“My personal philosophy to beauty is paying attention to oneself. I love to be outdoors, lots of fresh air, trying to take care of yourself as best you can. I always notice that comes through,” says Felicity Jones, the global face of @shiseido-owned @cledepeaubeauteus, which launches today. Head to WWD.com to read more about the actress’ love for beauty and how she prepared for her new role in “The Basis of Sex,” playing the young Ruth Bader Ginsburg. #wwdbeauty (📷: @dandoperalski)
For men’s fall 2018, @giuseppezanotti drew on elements from streetwear, sport, biker, combat and rock ‘n’ roll. Pictured here are a pair of shoes from the collection, featuring zippers, rhinestones, and silver hardware. Head to WWD.com to see a roundup of the accessories from Milan’s men’s fall 2018 shows. #wwdfashion (📷: Andrea Delb)
To celebrate the 25th anniversary of @ralphlauren’s snowboarding collection, the brand is mining its archives. The iconic brand is reintroducing vintage styles and dropping new designs for a color capsule that will be available in Ralph Lauren stores and @openingceremony on January 25. The capsule will consist of 10 pieces, including the Snow Beach Pullover, pictured here, which is a collector’s item that rapper Raekwon wore in Wu-Tang Clan’s “Can It Be All So Simple” video. #wwdfashion (📷: Tom Gould)
For @rochasofficial’s pre-fall 2018 collection, creative director Alessandro Dell’Acqua channeled the sophisticated and intriguing Catherine Denevue in the film “Belle de Jour.” Polished collarless coats, midi skirts, suits and ’60s graphic motifs were all featured in the collection, adding a sense of discreet luxury. See the rest of the photos on WWD.com #wwdfashion
“We tried to produce clothing of that couture quality, but the most daunting part was that we only had a matter of days [to do it],” said costume designer Lou Eyrich, who recreated Gianni Versace’s iconic looks for @americancrimestoryfx. Eyrich searched online retailers and vintage shops for original pieces from the design house and for @penelopecruzoficial, who plays Donatella Versace. Head to WWD.com to read how she created the Versace world. #wwdfashion
Only three months after her stellar debut catwalk season, @kaiagerber has inked her first big design collaboration –– with @karllagerfeld. The collection blends Lagerfeld’s Parisian chic aesthetic and the model’s signature West Coast casual style via RTW, accessories, footwear and more. The #KarlLagerfeldxKaia collection will launch in September with a series of events. Get all the details on WWD.com. #wwdnews #wwdfashion
Harrods plans to remove the famous statue of Princess Diana and Dodi Al Fayed from the bottom of the Egyptian escalators and hand it back to Mohamed Al-Fayed. “We are very proud to have played our role in celebrating the lives of Diana, Princess of Wales and Dodi Al Fayed at Harrods and to have welcomed people from around the world to visit the memorial for the past 20 years,” said Michael Ward, Harrods managing director. “With the announcement of the new official memorial statue to Diana, Princess of Wales at Kensington Palace, we feel that the time is right to return this memorial to Mr. Al Fayed and for the public to be invited to pay their respects at the palace.” More on the news, with reporting by @loreleimarfil, at WWD.com. #wwdnews