Nanette Lepore is moving closer to a final decision on an investor, possibly within the next month or two, financial sources said.
These individuals said Lepore and her husband, Robert Savage, chief executive officer of Nanette Lepore, are in discussions with several potential investors. Additional discussions and meetings with these investors are taking place this week, according to a source familiar with the talks.
These contacts said Bluestar last month made an offer to acquire outright the intellectual property of the brand, with Lepore taking ownership of the license and the running of the day-to-day operations. They also said the offer was rejected by the fashion firm. Talks are still ongoing between Bluestar and Lepore, although this time for a lesser stake in the firm.
Sources emphasized that Lepore is seeking an investor who can partner with her and Savage to grow the business, not for the couple to exit the firm or the fashion industry. Credit sources said Lepore has a well-respected brand, and the business has good cash flow.
Neither Lepore nor Joseph Gabbay, the cofounder of Bluestar, could be reached for comment.
Market sources said one key issue with a brand management firm is how much involvement the owner still wants in the business. Brand management firms own the intellectual property of the brand, but aren’t operators. They build relationships with licensees to leverage the brand equity and expand into other categories to grow the consumer base. The former owner who takes back the license risks getting moved out of the business if minimums aren’t met. And once the IP is sold, the former owner has no say on future distribution or the direction of the brand, particularly if the IP owner then gives another licensee ownership of a new territory for distribution.
That apparently was a key stumbling point for Lepore.
Having an investor take a stake, and essentially becoming a partner, is the far better deal for both a designer and an investor. One investment banker said that brands that no longer have the designer attached to the company tend to be worth less. Having the designer’s input develops the brand and helps both sides capture the upside as the company grows, this banker said.
Bluestar, founded in 2006 by Gabbay and Ralph Gindi, has been successful in moderate midtier distribution, but is now eyeing firms higher up on the fashion food chain. Financial and market sources said Bluestar had taken a look at Catherine Malandrino, who later elected to partner with Elie Tahari and Arthur Levine. Bluestar also reached out to other designers, such as Charlotte Ronson, to see if any might be interested in pursuing talks.
Financial sources speak highly of Gabbay and Gindi, noting that they’ve done a great job building the firm from scratch. Although once believed to be limited to smaller deals since most investors they pulled in were from the Syrian and Jewish community, that perception changed when Bluestar last year joined forces with Carlyle Group, the world’s second-biggest private equity firm, to bid for bankrupt men’s firm HMX Group. It lost to another brand management firm, Authentic Brands Group. Bluestar’s umbrella of brands includes English Laundry, Kooba, Kensie, Mac & Jac and Harvé Benard. It also once owned a stake in Liz Lange Maternity, sold in 2012 to Cherokee Inc., and Ron Chereskin Studio, sold in 2010 to J.E.M. International Inc.
Lepore started the business with a $5,000 loan from her father and now has 11 stores, including outposts in New York, Los Angeles, London, Shanghai and Tokyo. The designer also has a line at J.C. Penney, L’amour Nanette Lepore.
There'll be no rest for those headed to Europe for men's, as Paris just closed the gap with Milan. According to a provisional calendar released by the Chambre Syndicale, Paris Men's Week will now open a day earlier on January 16. See new highlights on the official lineup on WWD.com. #wwdnews #wwdfashion (📷: @kukukuba)
BREAKING: Jonathan Saunders is leaving @DVF. The designer has resigned from his position as chief creative officer of Diane von Furstenberg, the company said in a statement on Friday. At the time of his hire, von Furstenberg said Saunders’ arrival symbolized and facilitated her stepping back from the day-to-day duties that occupy the work of a full-time creative director. The British designer joined DVF in May 2016 and was in charge of all product categories. #wwdnews
For @versace_official’s spring ad campaign, the brand emphasized the archival prints from the spring tribute collection dedicated to the late Gianni Versace. Closing out the show were five of Gianni’s favorite models: Cindy, Naomi, Carla, Helena, and Claudia. Bowing on December 18, the new campaign is yet another tribute to supermodel-dom as the images by Steven Meisel are fronted by @iamnaomicampbell, @cturlington, @gisele and more. #wwdfashion
Four-time Oscar-nominated actress Annette Bening has been waiting 20 years to play Gloria Graham in "Film Stars Don't Die in Liverpool," which will be released on December 29. The movie about Graham – a Hollywood star known for her controversial relationship with a younger Englishman named Peter Turner – is based off a memoir Turned wrote. "She felt vulnerable to him, because she loved him, she really did love him. And anyone that we really truly are in love with, we re vulnerable to in a very deep way," said Bening. Read our full interview with the modern icon of an actress on WWD.com. #wwdeye (📷: @ninebagatelles; Styled by @cristinaehrlich)
The crisp white button down: a staple that can be dressed up or down and accessorized throughout the decades. Here, on a Art Basel-goer in 2017 on the left and on the iconic Audrey Hepburn in “Roman Holiday” in 1953 on the right. #tbt #wwdfashion (📷: Andrew Morales)
Known for her work with @victoriassecret, 25-year-old model @georgiafowler is raising her profile in Hollywood. Fowler stars in @vincecamuto’s holiday campaign, which launched in partnership with “Pitch Perfect 3.” “Almost every shoot with Vince Camuto, I’ve had to face a fear…It was definitely a challenge. I’m so grateful for it, though. I’ve always wanted to be a pop star, so that was the perfect chance,” Fowler said. Head to WWD.com to read about Fowler’s experience modeling, including at the #VSFashionShow, and her relationship with Nick Jonas. #wwdeye (📷: @jilliansollazzo)
EXCLUSIVE: Huda Kattan just became the first beauty influencer to land a major beauty deal. Kattan's business, @hudabeauty, has received a minority investment from private equity firm TSG Consumer Partners. The brand, which industry sources say is on track to do $200 million in retail sales for 2017, will receive support on product, retail and geographic expansion through the deal. Get all the details on the deal and read @_a_collins' interview with Kattan on WWD.com. Link in bio. (📷: @jgreenery) #wwdbeauty #wwdnews
Peruvian model @juanaburga_official – who is known for walking the runways of @rodarte, @viviennewestwood and @torybuch – is making the move to the big screen with drama “Los Últimos.” The film premiered in Argentina in November and arrives in the U.S. and Europe in 2018. On making the switch from modeling to acting, Burga told WWD: “It’s a completely different thing – a lot of people think it’s similar or try to connect things, especially like getting used to the camera or being looked at all the time or playing these different characrers, but film is a completely different story.” #wwdeye (📷: @jgreenery)
London’s newly opened @designmuseum will look back on the life and work of Azzedine Alaïa in a show that the designer helped to curate before he died of heart failure last month. The retrospective, which Alaïa had worked on with Mark Wilson, chief curator of the @groningermuseum, will look at the impact of his work worldwide. The show, “Azzedine Alaïa: The Couturier,” will run from May 10 to October 7. Read more about the exhibit on WWD.com #wwdnews #wwdfashion (📷: @zefashioninsider)