The Gores Group is looking to team up at J.Mendel.
This story first appeared in the September 18, 2013 issue of WWD. Subscribe Today.
Gores hired Barclays this summer to test the market for new investors in the designer brand, according to two financial sources. Barclays declined to comment and it is not clear how the search has progressed, but the bank started sending out feelers to would-be investors a few months ago.
“The Gores Group is committed to the long-term development of the house of J.Mendel,” said a spokesman for the private equity firm. “Following the momentum that the house is currently experiencing — with the opening of a flagship on [Manhattan’s] Madison Avenue, the launch of handbags and the arrival of a new ceo working along side Gilles Mendel — we are exploring the possibility of a strategic minority investor, which would help us to accelerate the development of the brand and increase its retail footprint.”
Los Angeles-based Gores bought into J.Mendel in Aug. 2010. At the time, Gores managing director Jeffrey Schwartz said, “There are many, probably hundreds, of fashion companies that are run by very talented creative people, but they are not as focused on running their businesses for profitability as they are for designing clothes.”
The private equity firm, which has about $3.6 billion in assets under management, went on to invest in junior lifestyle brand Big Strike Inc., Mexx and contemporary brand Cynthia Vincent.
On its Web site, Gores lists a number of “initiatives” at J.Mendel, including “turned declining sales trajectory to positive cash flow” and “refocused ready-to-wear business and expanded accessories line.”
Mendel continued on as chief executive officer, chief designer and “a substantial shareholder” in the company when Gores bought in. Last month, former Louis Vuitton executive Marc Durie joined the company as president and ceo. He also assumed the responsibilities of Susan Sokol, who exited the firm in February as president and chief operating officer after a five-year run.
J.Mendel’s wholesale and retail sales total an estimated $30 million.