WWD.com/accessories-news/hats-gloves-and-more/liberty-acquires-british-hatmaker-5290840/
government-trade
government-trade

Liberty Acquires British Hatmaker

Christys’ Hats counts Brad Pitt among clients.

View Slideshow

LONDON — There’s a new investor on the prowl in Britain: the London specialty store Liberty.
On Thursday, the store revealed it had purchased Christys’ Hats for an undisclosed price and that it was scouring the market for other British names, old and new.

“We’re not predators. What we want to create is a stable group of British brands,” said Marco Capello, managing partner at BlueGem Capital Partners LLP, which purchased the Liberty business in June 2010.
“Our customers tell us they are passionate about the Liberty brand, but they’re also passionate about British brands with a rich heritage. And we’d love to help the new guys, too. I’d love our next acquisition to be a new designer.”

Capello declined to comment on the amount of money earmarked for new investments, but said Liberty would be looking for companies with turnover between 1 million pounds and 25 million pounds, or $1.6 million and $40 million at current exchange.

 

Liberty generates about 100 million pounds, or $160 million, in annual revenue. The company said 2010 sales rose 35 percent year-on-year, and first half sales have risen 16 percent.

Capello is so bullish about the acquisitions drive, he said that if Liberty were to find an investment worth more than 25 million pounds, or $39.4 million, he’d be happy to “warehouse” it at BlueGem and eventually merge it into Liberty’s portfolio.

He believes one of Liberty’s biggest advantages as an investor is that it is a retailer with 4.3 million visitors each year. “The British Museum gets 5.7 million, so we’re not that far off,” he said.

Investment funds will come from Liberty’s businesses, Capello said, which include the central London flagship and wholesale fabrics. “All of the profits generated by Liberty will be reinvested in the business, and in acquiring new brands. Not one penny will come out in dividends,” Capello said.

To wit, Liberty is ready to unveil the first phase in a major, 4 million pounds, or $6.3 million, renovation project. The store will add a total of 2,400 square feet that will include five beauty treatment rooms, a personal shopping department, and a hair salon and rooftop bar.

The new space, on the corner of Carnaby and Little Marlborough Streets, already belonged to the store but had fallen into disrepair. The store also plans to expand its ground floor to house a further six handbag brands and eight new jewelry brands.

The beauty rooms will be unveiled later this month, while the expanded ground floor will be finished in March.

 

As for Christys’, the company was founded in 1773 and makes hats for men and women. Its clients range from Queen Elizabeth II to Brad Pitt to the British police force.

Liberty has already created a concept space for the brand in-store, and has launched initially with men’s hats in Balmoral tweeds, cashmere, silk and navy wool with a stripe ribbon band. Retail prices range from 55 pounds to 95 pounds, or $86 to $149. The store will unveil the launch of the first Christys’ women’s wear collection early next year.

In June 2010, BlueGem paid cash for Liberty, valuing the store at 32 million pounds, or $48 million at the time. Capello immediately delisted it from the AIM stock exchange and pumped 8 million pounds, or $12 million, into the store.

Under his watch, the company has begun turning a profit.

Under its previous owners, MWB Group, the store lost money and had several false starts, including the launch of Liberty of London branded merchandise and retail stores.

During the height of the commercial property boom here, MWB sold off a big chunk of the store that faced Regent Street, and then in March 2010 inked a sale-and-leaseback deal for its mock Tudor flagship in a bid to get some cash onto the balance sheet.

Asked whether he planned to build his new group in the image of LVMH Moët Hennessy Louis Vuitton, Capello said: “Bernard Arnault is doing an amazing job, and it would be really arrogant for me to make comparisons with LVMH. I’d just like to do one deal at a time and, hopefully, one day it will become big.”

View Slideshow