Gary Wassner, chief executive officer of Hilldun Corp., has been tapped by Brand Velocity Group, a consumer-focused private equity firm, to launch its fashion and apparel industry-focused vertical, BVG Fashion & Apparel.
He will continue with his 45-year career at Hilldun, which provides factoring, financing, purchase order funding, back-office support and business guidance to the fashion industry.
“We recognize that we have reached a critical moment in time where our core offering has evolved,” said Steve Lebowitz, founding and managing partner of BVG. “Our positioning reflects our continued growth into new and exciting avenues, the first of which is today’s launch of BVG Fashion & Apparel.”
BVG Fashion & Apparel looks to leverage the firm’s core competencies of operational expertise, marketing execution, and brand building, in addition to implementing its innovative approach toward human capital. The firm dedicates 10 percent of its total carried interest pool in every investment to its employees in a program called Share the Gains.
According to Wassner: “Many traditional private equity firms fail to realize that the value in fashion and apparel brands derives not just from financial metrics, but also the creativity and passion of their teams. BVG’s unique focus on human capital in addition to brand development is what will set us apart from other industry players, and I’m looking forward to the work we will do together.”
Drew Sheinman, founding partner of Brand Velocity Group, said: “What makes BVG great is the power of our network and our deep connectivity across all areas of popular culture. Gary brings unrivaled access to the fashion industry’s established and emerging players, which fits perfectly into our model and will be invaluable as we look to pursue opportunities at the intersection of entertainment and fashion.”
Earlier in his career, Sheinman was senior vice president, brand ventures at Endeavor, chief marketing and revenue officer for the Breeders Cup World Championship, president of Simon Brand Ventures and vice president, business development at Madison Square Garden and the Coca-Cola Co., in addition to his roles at The New York Mets and The Baltimore Orioles/Washington Redskins.
BVG Fashion & Apparel will focus on acquisitions of fashion and accessories brands with $10 million or more in earnings before interest, taxes, depreciation and amortization, and more than $100 million in revenues. Sheinman said they’re tapping companies that for some reason haven’t been able to get to the next level and will help them achieve that.
Asked what attracted them to Wassner, Sheinman said they haven’t previously been in the fashion space. “We see it as a great opportunity combining our expertise as investors and our relationships across talents, and sports/entertainment talents, while also bringing our great focus on caring about people and our Share the Gains program into the world of fashion. To do that, it requires someone of the level of expertise and experience and relationships that Gary has.”
Sheinman and Wassner have been talking about the fashion industry for about a year. “We have very similar perspectives on how to grow a brand, how to assist, rather than impose, and how to identify a really good prospect for our support,” said Wassner.
“Our model with Brand Velocity is to acquire companies,” said Sheinman. “Ideally, we’d like the CEO to stay in place and take some chips off the table.”
Wassner said this is just another aspect of help he can provide to both his Hilldun clients and others in the apparel, accessories and fashion/sports/entertainment fields. Since 2014, Wassner has had an investment fund, InterLuxe Holdings, which is no longer making new investments. One of its earlier investments was in Jason Wu. Their current investments are Mackage and ALC, which he said “are both doing extraordinarily well.”
“We’re comfortable being in those two firms, and if the right opportunity comes along to exit, we’ll consider it,” said Wassner.
Wassner said the key to what they intend to do at BVG is to support, and not impose on, the brands. “We’re looking at all types of brands in the consumer products space,” said Wassner. “We’re particularly interested in brand equity, brands that have significant opportunity to expand in multiple categories. We’ll look inside the brand and understand those opportunities, and leverage our pool of talent.” He said BVG would provide board representation and consulting expertise.
As for how long BVG would hold onto a brand, Wassner said: “We don’t have a time line. We’re not stuck to a time line, which many PE firms are. That’s one of the advantages and one of the major differences. Certainly we want to make money on the investments, and we’re not subject to a very strict time line for exit, so we can build a brand organically when appropriate and not be pressured to exit.” Wassner added that they’re only looking for profitable companies and not turnaround situations.
Wassner said he’ll be looking globally for acquisitions. “It has to be realistic for us to manage from afar. Certainly there are opportunities overseas, like in Australia, that make sense,” he said.
When asked whether the pandemic is forcing some young designers to consider selling their brands, Wassner said many of his young designer and contemporary clients thrived during the pandemic, whereas some of the mass brands had difficulties. Wassner said they’d be open to acquiring a mass brand, but it depends on the creative talent and whether they can do something for that brand.
Is the end game to take the company public?
“Not necessarily. That’s certainly an option, but it’s not the end game,” said Wassner.
Sheinman said they’re not a fund and have the flexibility to hold onto it. There’s no desperation to flip a company, he said.
“That’s one of the major reasons why this alignment made sense to me. I don’t think you can put a timetable on brand development,” added Wassner.
Sheinman thinks they’ll probably make the first acquisition in the next six to nine months. They have no set target for number of acquisitions a year or dollar deployment.
In January, Eli Manning, NFL quarterback-turned-broadcaster, joined BVG as a partner. Manning became the fourth partner at Brand Velocity Group, which was founded in 2019 and in 2020 acquired BBQ Guys, an outdoor appliance venture in which Manning is an investor with his father, Archie. The connection through BBQ Guys prompted discussions with Manning to pursue additional business opportunities. Lebowitz, Sheinman and Austin Ramos are the other three partners. Wassner isn’t a partner since he has his own business, said Sheinman.
Sheinman said Manning is learning about private equity. “He definitely helps open doors for us, and he also helps with his great experience and culture in leading two teams to Super Bowl championships. Eli has been a great resource with his network and reinforced with our networks. Part of his attraction to us was because we care about people and we embrace culture and core values,” said Sheinman.
BVG’s two other portfolio companies are Original Footwear, the largest contractual supplier of tactical footwear to the U.S. Department of Defense, and Magma Products, which is the largest manufacturer of barbecue grills designed for use on boats.
FOR MORE STORIES: