Veronica Beard Pre-Fall 2018

For better or worse, bankers and investors are buzzing about apparel brands again — from newer names like Veronica Beard and Sézane to familiar players such as Proenza Schouler, Tory Burch and Opening Ceremony.

While beauty has dominated industry dealmaking over the past few years and accessories and tech have also gotten some play, apparel has largely been on the sidelines, with owners waiting for better days and buyers remaining cautious.

Now that business in fashion is starting to stabilize (sort of) and there is a better sense of what the brick-and-click future could look like, more brands are testing the market for money to fuel growth — while investors are seeing if it’s time to move on.

The divide between those two groups can be stark.

On one side are newer players clearly still at the beginning of their growth curve and gaining share, particularly in the contemporary world.

The latest to cut a deal is Sézane. As reported exclusively by WWD last week, the five-year-old French brand just sold a 45 percent minority stake to New York private equity firm General Atlantic.

The appeal? According to sources, the company is growing at 75 percent and is resonating in the U.S., where it has a shop in New York’s NoLIta neighborhood and distribution in Nordstrom. Sézane’s feminine looks also cover dresses, jeans, jackets, shoes, handbags and venture into home goods.

For a still-small company, the combination of that growth trend and that breadth offers investors a relatively low buy-in and the hope for a lot of expansion down the line.

The Sézane story rhymes with the tale of Veronica Beard, which was founded by sisters-in-law Veronica Miele Beard and Veronica Swanson Beard in 2010, who based their business around the dickey jacket.

The brand took on an investment from fashion investing mainstays Andrew Rosen, John Howard, Lew Frankfort and Khajak Keledjian in 2013 and has been in growth mode since, adding its own stores, most recently opening a door in Los Angeles in February.

Sources said the brand has been out talking to would-be investors and looking for a partner who could perhaps help give the company a digital boost. A spokeswoman for the company said, “Although there has been a lot of interest in Veronica Beard, we are not actively seeking investment at this time.” 

But the buzz continues.

On the other side of the money divide are a set of more established businesses that are generally larger, with more clout and much more name recognition. They are in situations where they can’t promise the same kind of growth or are in the process of reinventing in a fast-moving market.

At Tory Burch, long-time investor Tresalia Capital is considering an exit after investing in 2009 and sticking with the brand through years of expansion. So far it’s unclear whether the investor will find a buyer willing to pay its price. Tresalia is said to be working with Goldman Sachs.

Proenza Schouler has also made the rounds in the rumor mill. One source said director Ron Frasch, an operating partner at one of the brand’s key investors, Castanea Partners, appears to be quietly checking the market to determine interest.

Frasch denied that to WWD and said: “People are always going to be listening to interested partners, but we have nothing going on at Proenza. We’re working with the business, it’s what we do. But I wouldn’t say there’s unhappiness or dissatisfaction, the team has been doing well. We’ve got a positive strategy going forward.”

Proenza, which like Veronica Beard also counts Howard and Rosen as investors, has been adjusting its approach. The brand has shuttered its store on Madison Avenue and pulled its Paris fashion show, opting instead to return to New York. It has also teamed up with Lancôme on a limited-edition makeup collection for fall and has a fragrance business that is licensed to that company’s parent, L’Oréal.

Adaptation has become the name of the game for the fashion establishment, which is increasingly pressured by the rise of ecommerce and Instagram, less traffic in department stores and ever-shifting consumer preferences.

Opening Ceremony laid off 23 workers last month, including some of its design staff, to right-size and refocus. The company, which sold a stake to Berkshire Partners in 2014, is working with investment bank Financo to explore its options after receiving some inbound interest.

“We’ve worked with Financo in the past, so we are working with them,” cofounder Carol Lim told WWD Friday. “I would say our process is not the normal process. A lot of this started with inbound interest from really different types of profiles. These are conversations that are interesting to explore, that give us opportunities to grow different stages of our business and we want to make sure it’s right.”

The ceo said the process is not being driven by any timetable, other than the pressure of a fast changing world, which figured into last month’s staffing changes.

“We really think about, we’ve got to shake things up and think about this in a different way,” Lim said, noting the marketplace seems to shift every two years. “We have to adapt and be a part of that so we can execute against the pace at which everything is moving. You have to love this beyond breathing oxygen to stay in it at the pace that we do.”

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