Carly Cushnie and Michelle Ochs have some new funds and another pair of hands to help them take their eight-year-old brand to the next level.
The design duo behind Cushnie et Ochs sold a minority stake in the business to Farol Asset Management and a group of fashion insiders, including Gary Wassner, who is chief executive officer of industry factor Hilldun and made a personal investment. This confirms a report on WWD.com Thursday that the brand was close to a deal.
As part of the transaction, Peter Arnold was brought on board as ceo. Arnold spent seven years as ceo of Cynthia Rowley and before that was executive director of the Council of Fashion Designers of America.
The terms of the deal were not disclosed, but the company plans to use the proceeds from the sale to expand its collection, speed growth and build the brand’s profile.
Cushnie et Ochs sells to about 125 stores and Web sites including Bergdorf Goodman, Neiman Marcus, Saks Fifth Avenue and Net-a-porter. Sources place the brand’s wholesale volume at $10 million to $15 million, but the plan is to go bigger while maintaining the company’s friendly atmosphere — it has all of 10 employees now and so far no one’s left. Ever.
“We always took pride in growing organically and smart and really making the right moves as we were growing the brand,” Ochs said. “It’s been very lean and we’ve built a very strong team. We’ve always focused on female power and energy and growing smart and finding the right people.”
Cushnie added that “maintaining the culture that we’ve grown over the years has been really important to us. Our team has become like family….We want a happy team so that we’re all productive.”
The pair share design duties at the brand and have split up specific tasks on the business side, paying special attention to the nuts and bolts of supply in order to reliably ship to wholesale accounts.
“A lot of young designers have problems with deliveries and that can really mess them up,” Cushnie said. “Our strong focus was really making sure our production was on time and our fit was perfect so there were not complaints from the stores.”
Ochs added: “This was a business for us from the beginning and we wanted to make sure this was running as a proper, operational business. The most important thing is we don’t just want to make clothes, we want to make clothes that people are wearing. It needs to get to the stores and women need to buy it.”
Arnold will now take on more of the business side, freeing the founders to focus more on design.
“Everything’s made here in New York and so we are very nimble in what we’re able to do,” Arnold said. “This distinguishes us from some of our competitors. When styles are successful in store, we can immediately recut and replenish in a very nimble way, which really enables us to turn in a matter of a few weeks, which is very, very helpful, especially in this climate.”
Arnold said the brand — which is known for its dresses but also has other categories — can be built up in the U.S. and Europe and also expand into handbags and then shoes.
“This is a brand that should be a lifestyle brand,” he said.
“We now need to bring a lot more attention to the brand through digital, social, the relaunch of our site, e-com and really invest some capital in those efforts and make sure we make much more noise about this brand,” Arnold said.
The deal raises the fashion profile of Farol, a New York-based private equity firm founded by Robert Azeke in 2011. It manages $250 million and has stakes in health club operator 24 Hour Fitness, packaging company Delphon, e-commerce provider Digital River and more.
Attorney Douglas Hand of Hand Baldachin Amburgey advised Cushnie et Ochs on the deal while Wassner’s son Brien Wassner of Milbank Tweed Hadley & McCloy advised the investors.