NEW YORK — Catherine Malandrino’s quest for an investor could lead it to become part of the growing contemporary portfolio at Kellwood Co.
Financial sources said that while Malandrino has approached a number of strategic prospective buyers, Kellwood is in the lead. One source described the discussions between the two parties as “deepening.”
Malandrino hired Los Angeles-based Sage LLC in December to find an investor, financial and market sources said. Instead, it now looks like the firm will be bought.
Officials at Sage and Malandrino didn’t respond to requests for comment Tuesday. A Kellwood spokeswoman said, “We can’t comment at this time.”
Sources said Malandrino ran into financial pressures after a poorly timed retail expansion in 2008 that included two boutiques, one in Las Vegas and the other on Melrose Place in Los Angeles. The Las Vegas store has since closed and the Melrose Place site, Catherine Malandrino Maison, remains open as the firm’s new concept store featuring a café, library and outdoor terrace.
The company closed another Los Angeles store, a freestanding unit at Sunset Plaza, a few weeks ago, but not before it had converted it into a temporary outlet site. The Sunset Plaza store was opened before 2008.
The company continues to operate stores in Manhasset, N.Y., on Broome Street in SoHo, on Hudson Street in New York’s Meatpacking District and in Paris. There are Malandrino boutiques around the world, including shops within Intermix and Neiman Marcus in the U.S., Holt Renfrew in Canada and Seibu in Hong Kong.
Investment bankers described the Catherine Malandrino name as well-known and highly regarded in the industry. A credit source said that both the contemporary collection, Catherine Malandrino, and runway line, Malandrino, have loyal client bases.
Malandrino, born in Grenoble, France, worked at Louis Féraud and Emanuel Ungaro before striking out on her own. Her first collection was presented in New York in 1998.
In addition to apparel, Malandrino has an accessories collection that includes footwear and handbags. She launched her first costume jewelry line with the fall/winter 2008 collection.
Kellwood has experience in building brands that have potential for a sizeable retail presence and has demonstrated a particular fondness for the contemporary segment of the business, making it a logical partner for Malandrino.
Earlier this year, it acquired Rebecca Taylor, having bought contemporary brand Adam and women’s outdoor performance and casual apparel label Isis in 2010.
Its first foray into the contemporary sector was via its acquisition of Vince in September 2006. Kellwood has grown Vince’s volume from $45 million at the time of the transaction to more than $150 million annually as of 2010, in part through retail expansion.
Kellwood’s chief executive officer, Michael Kramer, hasn’t been shy about the firm’s focus on doing more deals. And with good reason. Sun Capital Partners, a private equity firm, acquired then-public Kellwood in February 2008 for $762 million.
Kramer told WWD last year, “They bought us as an investment and they believe in our strategy,” he said. “Normally, the hold time is five years. They have an enormous amount of capital. We will reach a certain point where we will go public” or sell to a financial or strategic investor.
Having a strong operating platform, as well as a top-notch portfolio of brands under its umbrella, would enhance Kellwood’s valuation, whether Sun Capital chooses to go the initial public offering route or sell to another investor.
In the meantime, its plan for Rebecca Taylor is to add retail doors to its wholesale business, as well as update its Web presence with improved fulfillment functionality. And like Catherine Malandrino, the Rebecca Taylor brand has an international presence via its wholesale business.
Should a deal come to fruition, Kellwood would acquire Catherine Malandrino through financial assistance from Sun Capital. The acquisitions are structured so that Sun provides the funding, but it’s booked on Kellwood’s balance sheet.
In past deals, existing management teams have stayed on as Kellwood employees. The big change for the acquired firm is that it now has access to Kellwood’s core operating expertise, as well as financial support, to grow the brand.
Five months after Sun Capital acquired Kellwood, it installed Michael Kramer as its ceo. Shortly after Kramer’s arrival, Sun Capital plucked two non-fashion divisions, American Recreation Products Inc. and Gerber Childrenswear Inc., out of the Kellwood stable. Both remain part of the Sun portfolio today.
Kramer had been executive vice president and chief financial officer of Abercrombie & Fitch Co.
Sources didn’t provide estimates of Malandrino’s volume. Kramer has said that his acquisition landscape covers firms with annual volume between $200 million and $300 million, as well as smaller firms that have strong prospects for growth in the $100 million-plus range. He’s also said he is eyeing firms in the juniors’, women’s and teen-plus categories, in both apparel and accessories.
@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