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.
@tradesy is turning the concept of a showroom upside down with its new space in Santa Monica. Here, the company plans to hold events, art exhibits and a showcase rare fashion pieces like this Louis Vuitton boxing set. Get all the details on Tradesy’s first showroom on WWD.com. #wwdnews
Spotted last night at the @erdem x @hm launch event: Kate Bosworth, Rashida Jones, Kirsten Dunst and Selma Blair. The party, which took place in LA, also marked the opening of their pop-up shop. “I was interested in creating a collection that wasn’t in any way disposable. It was about pieces you’d create and keep forever, things that have a permanence to it,” designer Erdem Moralioglu said. #wwdeye (📷: Katie Jones)
Renee Zellweger in yellow in 2001 and again in 2017. Chosen as one of the 12 @pantone Leading Spring Colors (and dubbed “Meadowlark”), it only makes sense that the bright hue stands the test of time and is making a resurgence this season, seen already on stars like @blakelively and @gigihadid. (📷: Donato Sardello & @rexfeatures) #wwdfashion #tbt
Dior’s 70th anniversary celebration continues with a new exhibition at the Royal Ontario Museum in Toronto. “Christian Dior,” which is scheduled to run through March 18, takes a look at the founders tenure from 1947 to 1057 and feature 40 designs. Pictured here is an evening gown from the Ailée, fall 1948-49 haute couture collection. #wwdfashion (📷: Brian Boyle)
As one of the most recognizable models in the world, Christy Turlington Burns has an insider’s view of the fashion industry and the allegations of sexual harassment swirling around it. “I can say that harassment and mistreatment have always been widely known and tolerated in the industry. The industry is surrounded by predators who thrive on the constant rejection and loneliness so many of us have experiences at some point in our careers,” Turlington told WWD, along with her suggestions for how the modeling world should protect younger women and men. Read more on WWD.com. Link in bio. (📷: Tony Palmieri) #wwdnews
@asics America has tapped a new brand ambassador: famed DJ/record producer @steveaoki. This initiative is intended to set the tone for the new brand identity and philosophy and will include partnerships with influencers and in-store and off-line activations that will continue into next year. This is Asics’ most significant marketing effort in two decades, and is expected to attract younger consumers to the brand. #wwdfashion
24-year-old Jean Prounis is redefining the rules of jewelry. Formerly a studio assistant to Jemima Kirke and a design apprentice at Ghuran, she focuses on handcrafted subtleties and ancient goldsmithing techniques. “There was a really sterile feel in the environment and I wanted to have jewelry with character that shapes how you wear it everyday,” Prounis said. Each piece is hand made in New York, either by Prounis or three other jewelers in the district. #wwdfashion
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews