In fact, retail and fashion firms in general continue to be well capitalized, while the options and availability for those needing access to capital have never been better.
That’s one surprising conclusion to come from a panel discussion of financial experts who explored issues facing start-ups, IPOs and the challenge of finding the right financial partner. Participants included Norman W. Alpert, managing director at Vestar Capital Markets; Bill Contente, managing director of Equity Capital Markets of JPMorgan Securities Inc., and Susan O. Posen, vice chairman and chief executive officer of House of Z, which produces the Zac Posen collection. Philip F. Bleser, senior vice president and group executive for Mid-Corporate Banking at J.P. Morgan Chase & Co., moderated the panel.
Bleser described the balance sheets of many fashion and retail firms as “incredibly well capitalized,” and noted that capital availability in the marketplace has “grown dramatically even year-over-year.”
He said, “Inflows into equity mutual funds in 2002 were $12 billion. Last year, it was $100 billion to $106 billion. This year, through September, it’s been $151 billion, and that’s gotta be put to work.”
On the merger and acquisition front, there have been 35 so far in the fashion and retail sector. “That’s the same as it was last year, and we still have a quarter to go....Last year we thought this is as good as it gets and it clearly has gotten better,” Bleser told the audience.
As for how that money gets put to work, one option is investing in fashion and retail firms, according to the panelists.
“We’ve done a fair amount in this sector,’’ Alpert said. “Some people question our sanity at times, but it has been working out quite well dating back to deals in the mid-1980s.”
Vestar’s investments include Cluett American, maker of Gold Toe socks, and Sun Apparel, which held the Polo Jeans Co. license. More recently, Vestar helped executives at St. John Knits take the company private.
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