Paul Stuart, known for its special take on Anglo-American fashion, has been sold to its Japanese licensee.
The venerable New York City retailer, which has been a fixture on Madison Avenue for nearly 75 years, was acquired by Mitsui & Co. Ltd., for an undisclosed sum on Dec. 28. The news was kept under wraps until Tuesday when the Tokyo-based company revealed that Paul Stuart’s founding families agreed to sell their shares to Mitsui, which has become the retailer’s sole owner.
Michael Ostrove, president and chief executive officer and the third generation of the founding family to run the business, said: “I am delighted that we are able to cement and extend our relationship with respected partners of such long standing. Their commitment to Paul Stuart’s quality, integrity and continuity in every way mirrors our own. It is our great good fortune, as we begin our 75th anniversary year, to be presented this opportunity not only to polish, preserve and enhance our existing position, but to further build and expand our brand in such a positive manner.”
Ostrove was in Europe Tuesday and unavailable to comment further, but sources said he has signed a long-term contract to retain his position and will operate the U.S. portion of the business, which includes a Chicago store as well as the Madison Avenue flagship.
Paul Stuart, a 60,000-square-foot emporium on 45th Street and Madison, was founded in 1938 by Ralph Ostrove and his cousin Norman. Ralph Ostrove named the store after his son, Paul Stuart Ostrove. For nearly 60 years, the store was run by Clifford Grodd, who had married Ralph Ostrove’s daughter Barbara, along with Paul Ostrove. Paul Ostrove died in 2004 and Grodd in 2010. Since Grodd’s death, rumors have been circulating that the company would be sold.
Under Grodd’s tutelage, Paul Stuart became known for its soft-shoulder look in tailoring and is believed to have been the first American retailer to bring side vents to the States, as well as the three-button suit. All of the merchandise at Paul Stuart bears the retailer’s name. It designs much of its own product and alters what it buys in the market so it adheres to the Paul Stuart aesthetic.
Mitsui’s relationship with Paul Stuart dates to 1975 when it began to import the retailer’s private label merchandise into the Japanese market. In 1991, the relationship was expanded and Mitsui was granted an exclusive license to produce and sell Paul Stuart product in Japan. Since that time, Mitsui has sub-licensed the brand to Sanyo Shokai Ltd. and 13 other companies, which offer a wide range of product under the Paul Stuart name. There are two Paul Stuart flagships — in Aoyama and Ginza — in Tokyo as well as about 100 in-store shops in department stores and outlet centers throughout Japan along with e-commerce sites, all operated by Sanyo.
For the year ended March 31, annual retail sales of the brand in Japan reached 11.5 billion yen, or $133 million at current exchange.
Mitsui said the Paul Stuart trademark is registered in more than 30 countries in the Americas, Europe and Asia, all of which will now be controlled by Mitsui. This will allow the company to expand the brand globally. The goal, Mitsui said, is to grow the Japanese-licensed business to 20 billion yen, or $231 million, by 2015.
Mitsui said it “considers emerging countries as strategic markets in the fashion business domain. While the fashion market becomes more mature and sophisticated, as the income level rises in these markets, Mitsui believes that the demand for the Paul Stuart brand will grow and will contribute to expand brand recognition and business in these markets.”
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