By  on September 21, 2007

NEW YORK — Calypso Christiane Celle has sold a majority interest to Solera Capital LLC, a private equity investment firm based here.

Terms were not disclosed.

The multibrand retailer, which has grown rapidly in the 15 years since Christiane Celle opened the first Calypso store in St. Barth's, operates 30 units, including 13 in Manhattan and four in Paris. But the company never developed the infrastructure, systems and management team to properly support its expansion.

"We wanted to go to the next level," Celle said Thursday in her headquarters in Long Island City, N.Y. "I thought [with Solera] we'd get all the support and structure to grow the business."

Solera chief executive officer Molly F. Ashby said she foresees doubling the chain's size in the next five years through domestic and international expansion, "with room to go beyond that."

Citing Atlanta and Las Vegas, Celle said: "There are many cities where we don't have a store yet. In certain cities we can have three concepts together — women's, kids' and home — in 5,000 square feet. There are also resort areas like Waikiki and Maui."

Ashby plans to look at Asia in the next 12 to 18 months, initially with shop-in-shops or corners in established department stores. She also sees opportunities to develop the Internet business, launch product extensions and possibly develop partnerships with other retailers.

Calypso anticipates generating $60 million in sales in 2007. "We certainly expect to double that volume in five years and then some," Ashby said. "We're confident Calypso can grow and achieve all the financial metrics."

The increasingly competitive specialty store environment has prompted other retailers to seek private equity investments. Intermix in August said that Goode Partners LLC, a New York private equity firm, had made a minority investment in the company. Calypso, Intermix and Scoop have been flocking to the same top malls and upscale shopping thoroughfares. They also face competition from Barneys Co-op, which has expansion plans, and Neiman Marcus' Cusp, should the company decide to roll it out after a test period.

Celle said she was approached last year by a large fashion firm that wanted to buy her company. She hired the Sage Group to represent Calypso in discussions. Although the deal never came to fruition, it caught Ashby's attention.Celle liked Ashby's approach. "Most of the people we met with were focused on how to cut costs," she said. "I thought, 'They won't pressure us to make radical changes and fire people.' Solera respected the entrepreneur and understood the potential of the brand." The women also bonded over Annie's, the natural and organic food company in Solera's portfolio. Celle was familiar with the brand and served Annie's products to her children.

In addition, Calypso has been filling holes in its management ranks. "We never had a chief financial officer," Celle said. "We never had anyone to run the company."

Elizabeth Rose-Poleway, a senior executive at LVMH Moët Hennessy Louis Vuitton, has been named chief operating officer. She replaces Todd Kahn, who left after a brief tenure. Jerry Weinbrom, former vice president of finance for Echo Design Group, was named chief financial officer, and Michelle Money was hired as director of stores. There's also a new design director, Elisa Miller, who held the same position at Coach and earlier worked at J. Crew.

About 70 percent of the apparel in Calypso stores is private label, up from 50 percent a year or two ago. Celle stressed the importance of having outside brands in the assortment, saying: It's important for me to have other designers in the store."

She is exploring partnerships in certain product categories such as swimsuits. "We're looking for someone to help us develop our own line," Celle said. A designer for handbags, shoes and accessories is coming on board and Celle will design more of the home collection herself now that she's free of some of the administrative responsibilities.

Solera paid off Calypso's debt to position the company with a strong balance sheet so it would be primed for growth, Ashby said. She noted that Celle and her husband, Antoine Verglas, who cofounded the company, "have a very significant ownership position. We hold companies for a long time. You have to be a very careful steward of these things."

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