Most Recent Articles In Financial
Latest Financial Articles
- Chico’s Does Another Round of Outreach to Solicit Votes
- Brexit Selloff Sends Dow Down 611 Points
- Asian Shares Tank, Yen Surges on ‘Brexit’
More Articles By
Christopher Burch has found a new partner for C. Wonder — and it’s willing to pay big bucks to go along for the ride.
This story first appeared in the February 5, 2013 issue of WWD. Subscribe Today.
Boston-based investment giant Fidelity has taken a 10 percent stake in the budding chain, according to sources. One person familiar with the matter said the hedge fund paid $35 million, which would give C. Wonder a lofty $350 million valuation.
C. Wonder is still relatively small, but Burch has laid out ambitious plans for the chain.
A spokeswoman for C. Wonder declined to comment on the private company’s investors, but Burch did confirm that a new investor has come on board.
“This investment underscores that C. Wonder is resonating not only with our customer but with the financial and retail community,” said Burch, who is chief executive officer of Burch Creative Capital. “I am immensely proud of the work that Amy Shecter, president of C. Wonder, and her team have done in the last 16 months since we opened the first C. Wonder in SoHo in October 2011.”
RELATED STORY: WWD CEO Summit, J. Christopher Burch >>
Since that start in New York City, the brand has since grown to 10 stores plus pop-up locations.
Burch plans to expand C. Wonder to 50 to 100 stores by the end of 2014, including 20 to 30 doors abroad in markets such as Japan, Germany and Dubai. Ultimately, Burch has said he sees an opportunity to open about 110 stores in the U.S., with a total global footprint of 300 to 350 doors.
In its short life, the brightly colored C. Wonder, which sells apparel and home goods, has garnered more than its share of controversy.
C. Wonder became a point of intense friction between Burch and his ex-wife Tory Burch, who viewed the brand’s stores as aesthetically too similar to her own.
Rumors of a lawsuit swirled for months, but eventually it was Christopher Burch who sued in October, alleging his ex-wife and her employees interfered with his ability to develop C. Wonder. Tory Burch countersued, alleging that her ex-husband used his role as a director at her company to make “copycat” products for C. Wonder.
The awkward affair was ultimately settled late last year when Christopher Burch sold off some of his 28.3 percent stake in the Tory Burch business and the legal tussle was dropped.
That has cleared the way for C. Wonder to press on.
Investors are keen to tap into the potential of brands in the fashion sphere. Kors, which went public in December 2011, is now valued at nearly $11 billion and Tory Burch is now said to be valued at $2.5 billion or more.
Clearly, Fidelity wants to get in on the ground floor with C. Wonder — a somewhat surprising investment for the firm, which is known as one of the largest mutual fund operators in the world, serving more than 20 million people and institutions.
It is not known how often Fidelity invests in small companies such as C. Wonder. The firm’s FMR unit, however, is well known in fashion investment circles. FMR has $5.61 billion invested in apparel and accessories firms, including a $1.08 billion stake in Lululemon Athletica Inc., $948.2 million worth of PVH Corp. stock and a $774.2 million chunk of Michael Kors Holdings Ltd.
C. Wonder hasn’t reached the level of those businesses yet, but it has caught the attention of the industry. Burch had a number of retail brands in the works, but in November said he would focus on C. Wonder and Monika Chiang.
He seems to have a knack with shoppers.
“The only skills I really have are creativity and intuition,” he said at the WWD CEO Summit last month. “That intuition has allowed me to kind of link to the consumer.”
Burch puts the shopper at the center of the retail experience.
“All we care about is our customer,” he said. “Other speakers [at the summit] talked about how important fashion is and the product. I actually think the [store] environment and voices of the customer are more important. When you have no rules or regulations, you can tell your sales staff, ‘You can do anything you want to make them [customers] happy.’”