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.
@margotrobbie steps out onto the red carpet wearing @miumiu. The actress is nominated for “Outstanding Performance by a Female Actor in a Leading Role” in “I, Tonya” at the #SagAwards. (📷: Stewart Cook) #wwdfashion
For @massimogiorgetti of @msgm, the Nineties are his favorite decade. “They had a huge impact on my personal growth. What I like of the Nineties is that they are not so precise in terms of style as other decades…there was actually a bit of everything,” he said. As seen on MSGM’s Spring 2018 show: tie-dye and a bit of grunge, two styles that are synonymous with the decade #wwdfashion #wwddecades (📷: @kukukuba)
Breaking News: @hedislimane joins @celine as its new artistic, creative and image director. One of fashion’s preeminent image-makers and trendsetters, Slimane is to join the LVMH brand on Feb. 1 and unveil his first fashion proposition for men and women next September during Paris Fashion Week. It marks a major homecoming for Slimane, who cemented his reputation – and influenced men’s tailoring for more than a decade – as the designer of Dior Homme between 2000 and 2007. He went on to reinvent and ignite the house of Yves Saint Laurent, which he rechristened Saint Laurent, between 2012 and 2016 – all the while maintaining a close relationship with the Arnault family, which controls LVMH and Dior. Read the full exclusive story on WWD.com. Link in bio. #wwdnews #wwdfashion
“Personally I believe the Eighties have been the richest and more vivacious period for international fashion,” Giorgio Armani said when asked what his favorite decade of fashion is. It was a moment of disruption and experimentation and only thinking back to the first years of that decade is always an emotion for me, for what they have meant to me and my work.” The influence is clear in @giorgioarmani spring 2018 collection, pictured here, which was full of bright colors and unexpected prints. Read more about which decades designers loved most on WWD.com #wwdfashion #wwddecades (📷: @aitorrosasphoto)
For Lady Gaga’s only Italian show on her “Joanne World Tour,” the singer wore a range of @versace_official outfits. The standout piece: this custom-made bodysuit inspired by the brand’s spring 2018 collection. #wwdfashion (RG: @ladygaga)
@_camillaruth_ is expanding on the wellness-craze concept with @westbourne – a new NYC restaurant that’s both a healthy-minded café as well as a business that gives back to the community. Marcus works with the Robin Hood foundation to give back to The Door, a non-profit providing youth development services, and also hires employees through The Door. Read our full interview with Marcus on giving back through food on WWD.com. #wwdeye (📷: @lexieblacklock)