At a seminar titled “Mergers & Acquisitions: Growing Your Brand,” held on Kingpins’ opening day, some 60 attendees, including Goldsign’s Adriano Goldschmied and the Stronghold’s Michael Paradise, listened to a group of bankers, investors and lawyers proffer advice on how to prep their companies for a sale or cash infusion.
A growth trajectory is paramount. Philippe Faraut, managing director at Intrepid Investment Bankers LLC, who’s been involved in previous denim transactions including J Brand’s sale to Star Avenue Capital and NYDJ’s deal with Falconhead Capital, said investors will look at a company’s transactions over the past three years to analyze its sales, profits and consistency of cash flow. “All they’re buying is the growth,” he said. “What they want is the future.”
The global jeans market is projected to grow to $56 billion by 2018, according to the California Fashion Association. In the 12 months ended March 2013, the premium denim sector in the U.S. increased 11 percent to $1.4 billion, and 75 percent of premium denim comes from Southern California, the CFA said.
To ensure that business runs smoothly, jeans makers must keep an eye on the California laws that are constantly changing. Jeff Kapor, chair of Buchalter Nemer’s apparel law practice, cited mandates for signing contracts with sales representatives and paying patternmakers an hourly wage instead of an annual salary. Failure to follow such laws “can slow down the process of selling your company,” he said.
When the time does come to sell, company founders should consider some key points other than the deal value. Nate Pingelton, a principal at Marlin Equity, advised obtaining a smart partner who shares their vision, understands their priorities, brings more to the table than money and exhibits passion for their business. “If you have a misalignment on Day One, you’ll have a misalignment a year out,” he said. “Things change and you’ve got to have someone on the investment team who has passion and will fight for you.”
In the end, all advice pointed to growing sales, whether it was through social media, crowd-funding services like Kickstarter or producing domestically. Rich Anderson, managing director at Moss Adams Capital LLC, said social media “is a way to build awareness when the budget is very tight.” In response to a question about the importance of making clothes in Los Angeles, Faraut said: “If it helps your sales, I think it’s good….I don’t think it helps me get you a better valuation for your company.”
Even a company that has failed to turn a profit can harbor hope. Jeff Streader, an operating partner at Marlin Equity and former vice president of global sourcing at VF Corp., recalled that The North Face “was hemorrhaging” money when VF acquired the outdoor brand in 2000 for more than $150 million, including assumption of debt. “There’s a buyer out there,” he said.
@zacposen's go-to holiday gift? Cookies! "I'll usually bake cookies and send them as a gift," said the designer, who recently released his cookbook "Cooking With Zac: Recipes from Rustic to Refined." Get the recipe for his Brown Butter-Chocolate Chip Cookies via link in bio 🍪🍪🍪 #wwdeye #cookingwithzac
For @monsemaison’s pre-fall 2018 collection, Fernando Garcia and Laura Kim honed in on the brand’s many signatures — men’s wear, which was tweaked and feminized through deconstruction, proportion play and lots of bare shoulders. See the rest of the photos on WWD.com #wwdfashion (📷: George Chinese)
On Friday night, @yohjiyamamotoofficial received the Design for Asia Lifetime Achievement Award in Hong Kong. The 75-year-old designer has been celebrated for many years and is best known for his dark and avant-garde tailoring. “In my long career, in design, architecture, [I’ve been to] so many parties, this is the very first time that I have such a warm feeling, I really appreciate this,” Yamamoto said. #wwdfashion (📷: @dominiquemaitre)
Discovery is collaborating with British pop artist @philipcolbert on a new line of clothing and accessories called Discovery Shark. The collection, which will launch next summer for Shark Week’s 30th anniversary, features a whimsical line of women’s and men’s bomber jackets, sweatshirts, bags and more. #wwdfashion
“I’m always a big champion of a female rapper, and I’m glad to see a new voice that feels unique and authentic that’s coming up, and I think we’re going to see more great things from her,” said @itsjeremyscott about @iamcardib, who performed at @moschino’s Art Basel Miami Beach party last night. #wwdeye (📷: @lexieblacklock)
@janellemonae’s “What’s Your Frequency?” room in @refinery29's #29Rooms made its debut this week at the opening of the Los Angeles art exhibit. “It’s about the ongoing conversation around mass surveillance, the weaponization of technology and cultural uniformity. My space was created so that we can come together and talk about the complexities of our humanity,” said Monáe. #wwdeye (📷: @bucknerphoto)
@pantone announced their Color of the Year 2018: Ultra Violet. Nearly 20 months after the musician Prince’s death, fashion is having a purple moment. Varying shades of purple appeared on spring or fall runways, from @christopherkane to @calvinklein. @gucci’s Alessandro Michele bathed his fall runway in ultra violet-colored light at one point. Pantone 18-3838 is meant to “push the boundaries of what inspires us to look upward and outward to the future.” #wwdnews #wwdfashion (📷: @kukukuba)