Frank and Oak has found a new home with a new kind of buyer.
Unified Commerce Group acquired control of the Montreal-based brand, marking its entrance into a deal market made topsy-turvy by the coronavirus but one filled with opportunity.
And Frank and Oak could just be the start since Unified, which has assembled a team of fashion and digital veterans and big-name supporters, is working from a playbook that has it buying more next-generation brands and building them out globally and with a good deal of data savvy.
Founded by chief executive officer Dustin Jones, who previously held top jobs at Fung Retailing Group and Macy’s, and chief financial officer Greg Freihofner, Unified also seems to have a knack for networking.
Its board members include former Macy’s chairman Terry Lundgren, Chinese influencer and model Bonnie Chen, Good Charlotte singer Joel Madden, Nicole Richie and others with ties to law firm Clifford Chance, Human at Work and Lever Style Inc.
“Since his days at Macy’s, I’ve witnessed Dustin become a pioneer in digital retail and innovation, and forge important partnerships with global players like the Alibaba Group and the Fung Group,” Lundgren said. “Dustin and the UCG team have the skills, the innovative thinking, and the global network to bring a new model to the market when it is most needed.”
In short, Unified and its brain trust are looking to build a new kind of fashion empire — and the Frank and Oak deal is a good example of the approach.
“We were looking for a company that had global appeal in its DNA,” said Jones, noting the brand was among Unified’s top prospects from the beginning (the company has looked at about 70 brands and has another deal in the works already). Frank and Oak brought in sales of $43 million for its fiscal year, which just ended, but was on track to log a $53 million top line before the pandemic. Although Unified didn’t disclose the details of the acquisition, Frank and Oak was valued at $80 million last year.
Jones said the sustainable Frank and Oak is split evenly between men’s and women’s, has built significant businesses in the U.S. and Canada and has a size and fit that will help it transition easily to European and Asian consumers. It also has a subscription business, experience-focused stores and lifestyle appeal with looks ranging from T-shirts and jeans to outerwear.
The business ticks all four of the Ds that Unified is betting on. Jone said the brand is:
• Data-driven and proven to be smart about capturing and managing information about its customers.
• Digitized, with about 80 percent of its sales coming from online.
• Direct, with no wholesale to speak of.
• And nondependent, with a straightforward approach that doesn’t rely on a lot of different distribution models relying on third parties.
Jeremy Brown will remain ceo of Frank and Oak and said, “Unified Commerce Group shares the same values and principles as our team does and I have every confidence in the UCG team to take our business to new heights, allowing us to enter the global retail market and reach a new range of consumers while maintaining our Montreal roots.”
Unified is now looking to pick up brands that mesh well with Frank and Oak and can help it build a more complete picture of its customer base. “The number-one currency in retail is data,” Jones said. “We’re looking for companies that have rich data who know their consumer really well.”
That means knowing their households as well, too. So owning, say, a woman’s favorite dress brand and her husband’s favorite shoe brand makes sense. “We have to buy brands that have complementary data sets as we turn toward machine learning and consumer analytics,” Jones said.
The opportunities to pick up all those complementary data sets are only growing as brands and their investors look for ways to reposition amid COVID-19.
“The industry really changed from a sellers’ market to a buyers’ market,” Jones said.
Freihofner added, “We’re taking a symbiotic approach to brand acquisition by acquiring and investing in brands that have strengths in different areas.”
But at the center of it all is the consumer (and their data).
Elisabeth de Gramont, chief brand officer, said, “Brands must change their way of working to put the consumer at the center of everything they do.…We’ve created a platform that will design, operate and scale brands so that they will appeal to consumer audiences on a global level, while ensuring locally relevant execution in the shifting trends of the North American and Asian markets.”