The hot apparel and accessories firm, which is estimated to generate as much as $200 million in wholesale volume annually, is shopping around a 30 percent stake in the New York-based business, according to sources.
The steep asking price — a $935 million to $1 billion self-valuation for the whole company and about $300 million for the 30 percent stake — has narrowed the field of investors down to two main bidders, TSG Consumer Partners and Bear Stearns Merchant Bank, said industry sources.
However, calling the asking price too high, particularly given the current lending environment, sources estimated the stake’s price would come in closer to $250 million.
Tory Burch and a spokesman for TSG declined comment, and Richard Perkal, senior managing director and partner of Bear Stearns Merchant Bank in charge of its retail and apparel side, did not return calls.
Although Tory Burch has been courted by strategic and private equity investors for more than a year, the designer told WWD in April that she wasn’t planning anytime soon to sell the business that she and Christopher Burch, her soon-to-be ex-husband, founded four years ago, but that she also wasn’t against the idea in the long-term.
“I’ve taken a lot of meetings, and met with many people about this,” Tory Burch said in April. “I never turn down a meeting, but I just don’t feel that it’s the right thing to do right now.”
Although it is not known whether the 30 percent stake comes from the designer’s or her ex-husband’s share, sources have speculated an outside investor would provide a solution to the estranged couple working together as co-owners, which they have done since their separation two years ago.
The designer and management team likely would stay at the helm, using the money invested to fuel the company’s ambitious goals of expanding internationally, rolling out a scheduled five stores a year, adding product categories and expanding its wholesale business into more doors.
A rare success story in this economy, Tory Burch’s business is booming. Beginning as a retailer, Tory Burch has 14 of its own stores. With apparel wholesaling mostly from $119 to $166 and accessories from $95 to $272, the brand is sold in contemporary and updated bridge departments, reaching everyone from teenagers to Baby Boomers, in stores including Saks Fifth Avenue, Neiman Marcus, Bergdorf Goodman, Bloomingdale’s, Scoop, Selfridges and Harvey Nichols. Half the business is accessories, which more than tripled in sales last year, and the Council of Fashion Designers of America in May gave Burch the Accessories Designer of the Year award.
San Francisco-based TSG, which opened offices on Fifth Avenue last year, has a portfolio of luxury beauty brands, including Smashbox Cosmetics, N.V. Perricone M.D., Alterna Professional Hair Care and PureOlogy, and seeks to expand its reach to apparel, footwear and accessories. TSG looks for firms with sales between $50 million and $300 million, “high margins, great entrepreneurs and categories that welcome new products, which offer luxury and functionality,” managing director Alexander Panos told WWD last year. Private equity firms tend to flip firms after three to five years, and so far, TSG has held on to its investments from one year to, in the case of Voss water, more than five years.
“Retailers have been great partners in sharing which brands they love and which brands they can get behind…they are excited to have us involved because we bring wherewithal to companies they do business with,” Panos added. “A new company will sometimes have a lot of initial success, but then come the realities of how to provide a couple hundred retail doors with education and training and logistics. We can provide those resources immediately.”
Bear Stearns Merchant Bank, a private equity arm that remains after the shuttering of the bank, has a portfolio that includes mainstream retailer New York & Company Inc. and Stuart Weitzman Holdings LLC, and that once included Seven For All Mankind LLC.
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast