Thirteen down, three to go. Liz Claiborne Inc. has sold active brand Prana for $36.5 million, plus as much as $4 million more based on 2008 performance.
Prana Living LLC, a company formed by Prana's management team, and Steelpoint Capital Partners, a private equity firm with a portfolio that includes Kidrobot and Tasti D-Lite, bought the $33 million eco-friendly brand for more than 11 times earnings before interest, taxes, depreciation and amortization.
At the expected closing in a few weeks, Claiborne is to receive $18.1 million in cash after settling a contingent earnout of $18.4 million owed to Prana's founders, who reinvested the money in the buyout. All of the estimated 80 staffers on the Prana team will stay.
"We are very pleased with the multiple we received and the recognition of what the brand stands for and what it can do," said Roberta S. Karp, senior vice president of business development, legal and corporate affairs, at Claiborne.
Founded in 1993 by Beaver Theodosakis, Prana prides itself on its sustainable activewear and business model. Acquired in 2005, the Vista, Calif.-based brand was a victim of timing at Claiborne, which placed 16 of its brands on review July 11. The $4.99 billion Claiborne has promised to resolve the fates of the three remaining brands — Ellen Tracy, Kensie and Mac & Jac — by the end of the first quarter.
Ellen Tracy's destiny should be decided by the middle of the month, a deadline Claiborne has set to complete the sale with the sole remaining potential buyer, according to sources close to the deal. If a deal can't be reached in the next few weeks, Claiborne will keep the brand. Executives said the division will not be closed. The only remaining bidder is a consortium led by Windsong Brands and the Radius Group, which plans to license out the product, sources said. A tough due diligence has drawn out the process.
Even while on review, Prana, which wholesales in 1,400 doors, has been aggressively expanding. This fall, Prana opened its first retail door in Santa Clara, Calif. A flagship in Boulder, Colo., is to launch Feb. 13. The brand also started the premium outerwear line Scapegoat, which gives it more of a year-round business approach, according to Steelpoint.Retail investment plans for 20 to 40 more stores have been on hold until Prana found a new home. They will probably be delayed at least another year while the company focuses on growing its wholesale distribution to a more mainstream audience (including Nordstrom, which picked up the brand in all doors for spring), internationally and online. Steelpoint predicted Prana can grow to be a $250 million company.
"Before Liz Claiborne, we were on our own, and we like to be light and fast and we know how to run a successful company," Theodosakis said. "The people at Liz have been amazing. When they were buying us, owning us for two years and selling us, they always focused on what was best for us....The original plan was for us to be part of a portfolio of many active brands we could share synergies with, but when direction of the company changed, we got caught in the crossfire. We were a very small fish.''
Based in San Diego, Steelpoint specializes in management buyouts for expansion-stage companies. It has its fingers in the worlds of apparel, with Kidrobot and accessories firm Bag Borrow or Steal, and eco-health-friendly products, with Naked Juice and Genesis Today.
"I've been a customer for over seven years, so I felt good about the quality, know it's an authentic brand and like its position in a market we like investing in — a consumer company driving healthy living. We like that trend," said Scott Tierney, Steelpoint managing director. "What I admire about Prana and the management team is they were doing it before it became popular. When I heard it was being sold by Liz, I called Beaver — we hadn't met before — we got together for lunch and hit it off."
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast