Khaite found a new partner for its next phase.
The buzzy brand launched by Catherine Holstein said it was receiving an investment from New York growth equity firm Stripes.
“This is an exciting chapter for Khaite,” said Catherine Holstein, who was named the 2022 Womenswear Designer of the Year by the Council of Fashion Designers of America. “After opening the first store on Mercer Street in February, we are strategically looking ahead to continue to grow and strengthen our presence on a global scale.”
This is also the start of an exciting chapter for Holstein with the deal closing just as she prepared to welcome her first child.
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Holstein started the business in 2016 with an initial investment from Adam Pritzker of Assembled Brands.
“Cofounding and building Khaite has been an honor,” Pritzker said. “In partnership with Cate, we accomplished the extremely audacious goal of building the foremost American luxury brand. The next stage of investment will further accelerate Khaite’s expansion and ensure greater visibility for an already iconic brand that is redefining American luxury.”
Khaite offers ready-to-wear, footwear, handbags and accessories through 270 points of distribution with 120 global partners as well as its own e-commerce and brick-and-mortar operations.
The new money will be used to power the brand’s next stage of growth.
Ken Fox, founder and partner at Stripes, said, “Khaite is an extraordinary brand rooted in product quality and taste. We are excited to build from this tremendous foundation to support the team in scaling a global luxury house.”
Stripes specializes in high-growth software and consumer businesses, with investments in the sustainability-minded Reformation, workwear brand Brunt, running shoe company On Holding, intimates brand Parade and more.
The investment firm’s fashion brain trust includes operating partner Brigitte Kleine, who has served as president at Tory Bruch, Michael Kors and Alexander McQueen, among other high-profile industry roles.
In an interview, Pritzker said it was Stripes that would be “leading the next phase for this company” and he predicted the brand would move “onward and upward.”
Khaite’s success started at the very beginning, he said.
“The DNA of a company is created in the first 90 days,” he said, noting that the brand was able to marry strong design and product with strong business processes early on.
“Cate is a phenomenal product designer,” Pritzker said.
Behind that design talent were processes setting the brand up to thrive, he said, pointing to a laundry list of business basics, from making sure the margin structure worked to having the right infrastructure.
“The reason that building brands like Khaite is so rare is that nobody spikes in all of those areas,” he said. “You have to set it up from Day One.”
Given that Day One was only eight years ago — and a good deal of that stretch was marred by the pandemic — Khaite managed to go from strength to strength even as so many younger designer businesses struggled to find backers and the big money shied away from the sector.
“People probably didn’t think starting a luxury brand was a smart thing to do,” Pritzker said. “It worked incredibly well and, if you look at the market today, luxury is one of the few bright spots in the economy.”
He stressed the importance of the breadth of Khaite, which includes everything from sportswear to dresses, denim, outerwear, shoes, handbags and other accessories.
“We all know the best part of the luxury business lies in accessories and beauty and various other high-margin products, but you have to build a brand, you have to build a luxury brand,” he said, describing Khaite as a “true American luxury brand.”
And it’s a brand that also had some help from a hand practiced in European luxury.
Pritzker said Domenico De Sole, who formerly led Gucci and helped build the Tom Ford business, was “involved in helping build and assemble Khaite.”
WWD first reported that Khaite was evaluating its investment options in August, when a number of other brands were out testing the market and looking for money.
But while many of the brands on the hunt never connected with investors, Khaite was always viewed as a hot property that would find more backing as it plotted its future.
In an interview in February, Holstein marveled at the growth of the brand, which has crossed the $100 million mark and seen triple-digit growth year-over-year.
“If somebody told me we’d been here in 2023 when we launched in 2016 revenue-wise, I’d never believe them,” she said, as she prepared to open the brand’s first retail location, which is in New York.
At the time, the company was planning to open 10 stores in the next five years with Los Angeles likely being the next stop.