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Just over a month after completing its acquisition of HMX Group, Authentic Brands Group has written another check — this time for Judith Leiber, Adrienne Vittadini and Taryn Rose.
This story first appeared in the January 31, 2013 issue of WWD. Subscribe Today.
The New York-based brand development and licensing company has acquired the brands from Schottenstein Luxury Group for an undisclosed sum. Under the terms of the deal, Schottenstein will retain a minority interest in the brands, according to James Salter, chairman and chief executive officer of Authentic Brands.
“I’ve tried to buy all three brands three times,” Salter told WWD in an exclusive interview at the company’s 33rd Street offices in Manhattan Wednesday morning. “But Jay Schottenstein, chairman of Schottenstein Stores Corp., is an incredibly tough negotiator. We finally came up with a plan that would work by giving him a silent minority share.”
According to Salter and Nick Woodhouse, president and chief marketing officer of Authentic, the company has ambitious growth plans for all three labels, with the Leiber brand seen as the one with the most potential.
“That’s the prize,” said Salter. “The jewel,” Woodhouse agreed.
Judith Leiber founded her firm in 1963. The brand is most famous for its handbags including crystal minaudières, often in animal shapes, that average $5,000 each. Leiber also has a lower-price collection called Overture by Judith Leiber and offers a small selection of accessories, including eyewear and jewelry, as well as a fragrance. There are two full-price stores, in Beverly Hills and Las Vegas, as well as two outlets, in New York and Florida. Leiber sold her company to Time Products, a London watch company, in 1993 and retired five years later. Time sold the firm in September 2000 to Pegasus Apparel Group, which sold a majority stake to Schottenstein in May 2008.
“We really believe in it,” Salter said. “It’s a brand with a huge history in the luxury space. It’s nontarnished, and we are very comfortable that we’ll be able to build on that around the world.”
A “select group” of the current Leiber employees will be retained and will join Authentic to work on the brand. “There’s a lot of intrinsic talent there,” Salter said.
Woodhouse said distribution will continue to be limited and will center around the opening of “controlled” shops-in-shop, stand-alone stores and wholesale distribution in high-end independent specialty stores. Expanding into e-commerce will also be a priority.
“It’s not an Hermès or Chanel yet,” he said of Leiber, “but it can be. We’re in no great rush and will keep the heritage alive through select distribution.” Sources say the brand has volume of around $18 million.
“It’s small compared to the other brands in the portfolio,” Salter said, adding that Authentic acquires brands with retail volume in excess of $100 million that have “highly scalable” models. But growth for Leiber in the U.S., as well as in China, Japan, Hong Kong, the Middle East and Europe, is in the cards. “We feel comfortable we’ll be able to find good strategic partners in retail and wholesale over the next 60 days,” Salter said.
Regarding product, “The goal is to really grow the handbag business,” Salter said, noting that, “down the road,” Authentic would also like to branch out into home products, “elegant, high-end footwear” and bridal. “Apparel will be the last piece — if we decide to go there. We would do amazing wedding dresses before ready-to-wear.” Lower-priced lines such as Judith by Judith Leiber and Leiber by Judith Leiber will be entertained down the road. “But we have to earn that,” Salter said.
Woodhouse said Authentic plans to expand the brand into “personalization” and is “very close” to naming a licensing partner for that part of the business who would work with customers to have their initials or names monogrammed onto the products.
Collaborations are also expected to be explored, the first of which would be with Authentic’s Marilyn Monroe label. “I can see a Marilyn Monroe Judith Leiber ‘It’ bag,” Salter said, “maybe with Harry Winston diamonds that sells for $1 million.”
The largest brand of the three is Adrienne Vittadini, which Schottenstein acquired in 2008. “We looked at it six years ago but were outbid by Jay,” Salter said. “But we like it even more today. Jay did a great job putting it into the licensing business.”
The brand is known for its knitwear, fragrance, luggage, eyewear and women’s apparel produced by Li & Fung. Authentic plans to take the brand to Canada and Europe and expand its offering into careerwear.
“The brand’s been around a long time and it has international acceptance,” Salter said. Taryn Rose, which was founded by an orthopedic surgeon by that name, was acquired by Schottenstein in 2010 and offers “comfortable fashion footwear,” Salter said.
“It’s a small company today but is doing well at retail, and we plan to take it international and to other categories such as athletic footwear,” Salter said. Fashion leggings with compression, knapsacks or shoulder packs that are designed for comfort are also seen as possible product extensions, they said, along with a line that would target women who stand all day and still want comfortable footwear.
They declined to provide a volume figure for Taryn Rose but said that while it is below Authentic’s $100 million threshold, it nonetheless is “sizable, and made the cut to come into our flow. We have big aspirations for it,” Salter said, noting that the company plans to aggressively use omnichannel. “Over 31 percent of its sales are non-brick-and-mortar,” Woodhouse said.
He said that since all three founders are still alive, Authentic plans to reach out to them to be involved in the businesses in some way, although their interest and receptivity is not known at this point.
A representative from Schottenstein Luxury Group declined to comment on the deal, but it is believed that by selling these labels, that business will be shuttered. Mary Gleason, president of SLG, is expected to transition out of the company. She did not return calls seeking comment.