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NEW YORK — Fashion has a new trio.
This story first appeared in the October 12, 2011 issue of WWD. Subscribe Today.
Elie Tahari and Arthur S. Levine have completed a deal to invest in Catherine Malandrino with plans to help the designer grow her brand both at retail and wholesale, as well as with new categories and global expansion. As part of the strategic partnership, Malandrino will benefit from Tahari and Levine’s resources in both Asia and Europe, as well as their business expertise to help strengthen the company’s infrastructure.
WWD first reported on a deal between Tahari and Malandrino on Oct. 4.
“A year ago, we knew that after 12 years as a designer in New York, we were looking for the right partner to grow as a brand,” Malandrino said on Tuesday, sitting with Tahari and Levine in her West 39th Street showroom here. “Of course, when you get to this process, it’s a long one, because you want to make sure you are going to make the right choice for the long term.”
After exploring several potential options, she found suitable partners in Tahari and Levine.
“We have been looking for a brand to partner with,” Levine said. “I think Catherine has a distinct look and personality. I think the designs are so good that it should be expanded into other categories. Overall, I feel that Catherine Malandrino has the potential to become a major designer brand.”
“We admire her talent immensely,” Tahari added. “We feel that her aesthetic, which is feminine and elegant, and soft and sexy, is a category of product that the consumer is hungry for, and the stores are searching for this type of design.”
The value and size of the stake was not disclosed. According to sources, the Catherine Malandrino business has an estimated total sales volume of $20 million to $30 million. The executives referred to it as “an equal partnership.”
“For me, it was not only a financial decision but a strategic one that I value a lot for the long term,” Malandrino said. “We feel it’s a real partnership to which we all bring our best. This was very important for me. Yes, there is a financial investment, but at the same time, there are strategic strengths in the deal that make it unique as partners.”
Tahari and Levine have a business relationship that dates back to 2001 when they launched the Tahari ASL business, which includes the Tahari Arthur S. Levine brand of suits and dresses, as well as a private label division. Levine, a longtime Seventh Avenue executive, was previously the chairman of Kasper ASL and, before that, principal and chief executive officer of Anne Klein and president and ceo of Kasper.
The duo owns factories in Asia as well as in Italy, and Malandrino will be able to utilize those resources. The two executives will also help the designer build an infrastructure to strengthen the back end of her operation.
“In China, we have 900 people working for us in our factory, which will be a unique advantage for Catherine, especially considering that embroidery and beading have always been a major part of our collection,” Levine said. “We will give Catherine the ability and access to production.”
Tahari and Levine said there are currently no plans to make further acquisitions, and the plan is to focus on building the Malandrino brand.
Malandrino has been looking for an investor since late last year and, as reported, held talks with Kellwood Co. Dan Gardenswartz, managing director at Sage LLC, which represented Malandrino, said, “Catherine Malandrino is a designer with a fabulous brand that’s universally well regarded by consumers and the trade. The business over the last several years has expanded rapidly beyond the firm’s infrastructure [capability], and Tahari brings the know-how, resources and infrastructure to enable Malandrino to take the business to the next level.”
According to Gardenswartz, that next level includes expanding the Malandrino brand’s product categories, distribution and global presence. “Her business globally has been very strong; there’s demand for her products in the emerging markets in Asia, the Middle East and Eastern Europe where consumers love the brand and luxury products,” he said.
Ron Frasch, president and chief merchandising officer of Saks Inc., welcomed the partnership, saying that “Catherine’s talent and I think his organization can provide the kind of support to allow her to design and be very successful. I don’t think she has had the support around her that she needs, and having Elie and his organization, manufacturing and merchandising capabilities, and just savvy, will be a big plus to her.”
Jim Gold, president of specialty retail at Neiman Marcus Inc., echoed the sentiments. “Elie has got phenomenal sourcing and merchandising capabilities, and so he will be able to dramatically improve the price architecture of her line, and he also will help her build the collection, classification by classification.”
Eventually, there are plans for a secondary line targeting a wider retail segment, but initially, Tahari will work closely with Malandrino on building the designer line, while Levine will concentrate on licensing and other categories. “As far as licensing, we will go slowly, and be very selective, and do the right thing to grow the brand,” Levine said. “Everything has to reflect perfectly on Catherine, on the product and on who we are.”