A&G Group, which owns Asprey and Garrard and has been working to find an investor, is homing in on a deal — and it could be a sale of one or both of its luxury brands.
A&G has been working with Deloitte and Citigroup since last summer to find new investment. But industry sources now say the two brands could instead be sold — and perhaps to different buyers. The interested parties are not fashion or luxury groups, but rather private equity investment firms with retail experience.
There are a number of investors involved who are in the final stages of closing a deal or deals, the sources said. A&G’s current shareholders include Lawrence Stroll and Silas Chou, Edgar Bronfman Jr., Morgan Stanley Capital and the Luxembourg-based TAG Group. However, the extent of their current involvement, or indeed their status as shareholders in A&G, remains unclear.
Negotiations over the past few months have been time consuming and complex, with A&G management directly involved in every step, they added.
An A&G spokesman declined to comment Tuesday.
As reported last month, A&G has denied that Asprey, Garrard and their associated companies were in receivership. In June, A&G hired Citigroup to help it find a new partner to fund retail expansion of both brands. The company said at the time that it was looking for an additional $50 million investment.
Last summer, Stroll himself acknowledged the A&G project was a long-term challenge. “This is an endurance race, not a sprint,” he said. “Will we win the endurance race? I don’t know. But we certainly haven’t entered the sprint race.”
Stroll added that he and his partners were “absolutely committed” to the A&G business in the long run.
But he also said that in retrospect, he would have approached the stores differently. He said the Asprey store in London was doing well, but the New York flagship was having a harder time.
“New York was a marketing experience, and not necessarily a pleasant one,” said Stroll. “We opened a store that was larger than the business required. In hindsight, would we do it again? I don’t know. But we’re now expanding all over the world, and sales at A&G are up 59 percent.”
In the fiscal year ended March 31, 2005, sales at the group rose 59 percent to $51 million from $32 million.
Last year, A&G took advantage of London’s soaring commercial property market and sold Asprey’s Bond Street store to Quinlan Private, the Irish property group. The current building has been handed back to A&G Group on a long-term lease that will last for at least 25 years.
A&G said it would use the proceeds from the sale of the property — about $101 million — to fund its expansion. An A&G spokeswoman said at the time A&G was growing more rapidly than expected, and needed the extra investment.