Castanea Partners has invested in Ippolita, a jewelry firm known for its hand-wrought 18-karat gold, diamond and gemstone pieces with an artisanal vibe.
The size of the investment by the private equity firm was not disclosed. The eight-year-old New York-based brand's founder and creative director, Ippolita (she goes by one name), and chief executive officer Lauren Sharfman will continue in their current roles. Castanea is aiming to double retail sales within three to five years.
"We're interested in growing luxury brands with potential in any case," said Brian Knez, co-managing partner of Castanea, a six-year-old Newton, Mass.-based firm that acquired a majority stake in Betsey Johnson in August. Financial terms were not revealed. "We're particularly interested in Ippolita. We think designer fine jewelry is one with significant potential and with growing importance not only to Neiman's and Saks, but to their customers as well. We've been following the category and looking at it generally."
In April, Ippolita told WWD that its retail sales were $40 million in 2006, with accounts in 80 U.S. doors, including Saks Fifth Avenue, Neiman Marcus and Bergdorf Goodman, as well as a select group of specialty boutiques. The company also said that sales increased by 77 percent and 75 percent in 2005 and 2006, respectively. Internationally, the brand is sold at Harrods in the U.K., Holt Renfrew in Canada and in select specialty boutiques. Ippolita also has an e-commerce business through its Web site, ippolita.com.
Castanea plans to help Ippolita build systems and operations and to open two U.S. flagships. In April, the firm said it would open a store on Madison Avenue in Manhattan, but the lease fell through.
Women purchasing for themselves drive most of Ippolita sales. Prices for jewelry range from $290 to $25,000, with the core business at $495 to $6,000 at retail. A sculptor and former dancer, Ippolita also creates objet d'art, tabletop and sculpture that will all be available at the stores.
"This is allowing us to primarily build the infrastructure that we need to support the tremendous growth we've been experiencing," Sharfman said. "What we're really looking to do is have a focused brand-building opportunity with a strategic partner. Castanea Partners is the right partner for us. It gives us access to the capital when we need it."Six months ago, the company decided to end its private label costume jewelry business. Sharfman said the decision was made before Castanea was in the picture.
"It's all about focus and editing focus when you have a designer like Ippolita," she said.
Ippolita said, "I feel like now there will be ample opportunity within the creative side."
The company plans to launch a sterling silver collection in the spring. The focus of the strategy will be fine jewelry primarily. Home and tabletop categories may become important in coming years, Knez said.
"Their potential in the fine jewelry category is significant," Knez said. "Ippolita and Lauren have done a great job of what we think is a very exciting brand in this particular category. Our objective is that as they continue to grow, that they build out the appropriate infrastructure."
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