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.
Breaking News: @louisvuitton's men's artistic director @mrkimjones is leaving the French fashion house after nearly 7 years. Jones joined Louis Vuitton in 2011, following a three year tenure as creative director of British luxury goods brand Alfred Dunhill. Jones is to exit Louis Vuitton after showing his fall 2018 collection for the brand in Paris on Thursday. Read the full exclusive story on WWD.com. Link in bio. #wwdnews #wwdfashion
For men’s fall 2018, @giuseppezanotti drew on elements from streetwear, sport, biker, combat and rock ‘n’ roll. Pictured here are a pair of shoes from the collection, featuring zippers, rhinestones, and silver hardware. Head to WWD.com to see a roundup of the accessories from Milan’s men’s fall 2018 shows. #wwdfashion (📷: Andrea Delb)
To celebrate the 25th anniversary of @ralphlauren’s snowboarding collection, the brand is mining its archives. The iconic brand is reintroducing vintage styles and dropping new designs for a color capsule that will be available in Ralph Lauren stores and @openingceremony on January 25. The capsule will consist of 10 pieces, including the Snow Beach Pullover, pictured here, which is a collector’s item that rapper Raekwon wore in Wu-Tang Clan’s “Can It Be All So Simple” video. #wwdfashion (📷: Tom Gould)
For @rochasofficial’s pre-fall 2018 collection, creative director Alessandro Dell’Acqua channeled the sophisticated and intriguing Catherine Denevue in the film “Belle de Jour.” Polished collarless coats, midi skirts, suits and ’60s graphic motifs were all featured in the collection, adding a sense of discreet luxury. See the rest of the photos on WWD.com #wwdfashion
“We tried to produce clothing of that couture quality, but the most daunting part was that we only had a matter of days [to do it],” said costume designer Lou Eyrich, who recreated Gianni Versace’s iconic looks for @americancrimestoryfx. Eyrich searched online retailers and vintage shops for original pieces from the design house and for @penelopecruzoficial, who plays Donatella Versace. Head to WWD.com to read how she created the Versace world. #wwdfashion
Only three months after her stellar debut catwalk season, @kaiagerber has inked her first big design collaboration –– with @karllagerfeld. The collection blends Lagerfeld’s Parisian chic aesthetic and the model’s signature West Coast casual style via RTW, accessories, footwear and more. The #KarlLagerfeldxKaia collection will launch in September with a series of events. Get all the details on WWD.com. #wwdnews #wwdfashion
Harrods plans to remove the famous statue of Princess Diana and Dodi Al Fayed from the bottom of the Egyptian escalators and hand it back to Mohamed Al-Fayed. “We are very proud to have played our role in celebrating the lives of Diana, Princess of Wales and Dodi Al Fayed at Harrods and to have welcomed people from around the world to visit the memorial for the past 20 years,” said Michael Ward, Harrods managing director. “With the announcement of the new official memorial statue to Diana, Princess of Wales at Kensington Palace, we feel that the time is right to return this memorial to Mr. Al Fayed and for the public to be invited to pay their respects at the palace.” More on the news, with reporting by @loreleimarfil, at WWD.com. #wwdnews