JH Partners, a San Francisco private equity firm, will strive for international growth of its latest acquisition, Italy's $270 million lingerie and fashion group La Perla SpA.
"I don't think La Perla is as well known in the U.S. as it should be,'' John C. Hansen, president of JH Partners, said in an interview. "We are very involved in making La Perla a global brand, but we're not specifically a financial firm. We are a brand and marketing company, and La Perla has always been a special brand. We think there's a lot of opportunity for distribution."
Elaborating on 54-year-old La Perla's potential, Hansen said, "Major parts of the brand's story have not been effectively communicated in the U.S. La Perla has tremendous presence in Italy and the U.K., and other parts of Europe….We are looking to expand into Eastern Europe, as well as the Far East and Mideast."
Hansen said JH Partners would have a more than 50 percent stake in La Perla; the group's brands include Malitzia, Marvel, Black Label by La Perla, La Perla Mare swimwear, La Perla Prêt-a-Porter and men's underwear by GrigioPerla. However, he would not disclose a dollar amount. The deal "should close by the end of summer,'' he added.
La Perla maintains 63 boutiques worldwide, nine of them in the U.S., along with two outlets.
Asked to explain the investment appeal in an upscale intimates brand like La Perla, Hansen said, "We are a narrowly focused equity group. We focus exclusively on consumer brands distributed through multiple channels of distribution, primarily at the prestige level and the middle market. We do a fairly small amount of investments, so we typically get involved in something we know we can make a difference in. We approached La Perla and spent time to get to know the family. It's a fabulous brand and a wonderful story."
He said the family would remain involved in the company. Alberto Masotti will continue as chairman, and his wife, Olga, will remain on the board, as will his daughter, Anna, who will continue as design coordinator.
Jeffrey H. Hansen, brother of John C. Hansen and a principal of JH Partners, will assume the role of chief executive officer, formerly held by Alberto Masotti. Officials at La Perla, based in Bologna, could not be reached for comment.John C. Hansen said his firm invested in "growth-oriented businesses with sustainable competitive advantages and revenues" of $10 million to $300 million. Hansen, whose team consists of 15 partners specializing in private equity investing, business operations and finance, said they had invested about $500 million themselves and with co-investors since the firm was founded in 1986, They are currently investing a $350 million fund that was raised in 2006.
Hansen also is chairman of Design Within Reach, Frette and Jurlique, an organic skin care line. He is on the boards of Bare Escentuals Inc., GoSmile and Lussori. JH Partners invested a majority stake in Bare Escentuals in March, and Lussori timepieces and fine jewelry in April. The firm acquired Frette, an Italian specialist of luxury bedding, linens and home accessories, in 2006 after a two-year stint developing Frette's business with Coraline SpA, a special-purpose vehicle controlled by JH Partners. At the time, Frette, a former unit of Fin.part, needed around $107 million to get back on its feet.
La Perla's U.S. business continues to be a money maker through the nine boutiques and two outlets in upscale locales. In 2004, La Perla's wholesale and retail revenues in the U.S. were around $23 million, said a former chief executive for the U.S. operation, Gianluca Flore.
Regarding distribution, Hansen said, "We'll be focusing on a number of distribution channels, have the right partners, do the right education and make sure you have happy customers. A great example of what we want to do is Frette. Everything at Frette was broken at the company but the sheets. The supply chain, the management, the hospitality business, the distribution were all broken down. But it's much better now and there's no financial distress."
Hansen noted that since JH Partners acquired a majority stake in Bare Escentuals "it has become the number-one beauty brand at Sephora and on QVC."
"The customer today is very different than the customer 10 years ago," he added. "We were told selling Bare Essentials on QVC was the kiss of death. But the customer today wants it when she wants it, and buys it where she can buy it. If you are careful about presenting the brand story, the customer will respond."
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