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."
In honor the @CFDA’s announcement of @iamnaomicampbell receiving the Fashion Icon Award at the 2018 #CFDAAwards, which will take place on June 4, here’s a #tbt of the supermodel on @michaelkors’ runway in 1991. #wwdfashion #wwdarchive (📷: George Chinsee)
“I was making the guacamole when my scout saw me,” says model @stuckinteenage on being discovered just six months ago while working at @chipotlemexicangrill. Since then Williams has signed with @dnamodels, walked in her first show at @calvinklein and landed on the cover of @vogueitalia – a high point of any model’s career. To read @lisajlockwood’s full interview with the model on her experiences thus far, head to WWD.com – link in bio. (📷: George Chinsee)
“I love the idea of dialogue, period. It’s where I’ve always gotten my inspiration from: hearing other women speak, their journeys and their paths,” said @hereisgina, who delivered the keynote speech during @sxsw for @createcultivate in partnership with @fossil. For her two panels, Rodriguez chose female empowering, female-led and female entrepreneurs to focus on. Head to WWD.com to read more about her thoughts on Time’s Up, growing up in a family of women and why we “need a girls’ club.” #wwdeye #sxsw (📷: @jgreenery)
Leading luxury brand are shaking things up to keep up with streetwear. Case in point: the arrival of @mrkimjones as artistic director of @diorhomme. Jones, who succeeds @Kris_Van_Assche, is seen as one of the handful of designers who can actually straddle the luxury and streetwear worlds — which could lead to even more changes at established brands. What could this mean for the rest of the menswear landscape? Head to WWD.com to find out what experts predict #wwdfashion (📷: @franckmura)
“It’s like buying groceries. You’re going to buy the best mango, the best mozzarella, the best things. You have to, or others are going to take it all,” said @gabrielahearst on why she uses only the finest fabrics. Last week, Hearst received her first @cfda nomination for Womenswear Designer of the Year, and earlier this month she opened a permanent showroom in Paris. To read @jessiredale’s interview with the designer and find out why this is shaping up to be a big year for her, head to WWD.com. #wwdfashion (📷: @francoisgoize)
“It’s an interesting thing, playing a younger version of your mother. It’s an interesting concept. I adore my mom and love her in every capacity, but it was just something that had never crossed my mind,” says @anniemstarke on playing a young Joan Castleman in “The Wife.” The same role will be played by her mother Glenn Close. Read more about her growing up in the film industry as the daughter of producer John H. Starke and Close and what she has planned for the future #wwdeye (📷: @nataliamantini)
@asics is launching a new streetwear sneaker inspired by its latest ambassador, @steveaoki. The Hyper-Kenzen x Aoki, which will launch at @footlocker stores exclusively tomorrow, is a slip-on style that incorporates the brand’s proprietary Gel technology through beads integrated into the midsole for comfort and endurance. Read the full story on WWD.com.