WHP Global has added to its war chest.
The New York-based brand management firm that owns the Anne Klein and Joseph Abboud brands has secured an additional $150 million in equity commitment from funds managed by Oaktree Capital Management LP. That brings Oaktree’s total financial investment in WHP to $350 million.
WHP was created in July and has more than $1.4 billion in retail sales across its portfolio of brands. Yehuda Shmidman, WHP’s chairman and chief executive officer, said: “WHP Global was established to acquire large-scale and well-known consumer brands with strong growth prospects in international and digital markets. Succeeding in that mission is made possible through the tireless work of our team, our relationships with a broad network of business partners and our partnership with Oaktree. We’re pleased to have completed two major transactions in less than a year, and we look forward to continuing the momentum for the balance of 2020.”
He said he hopes to use the funds to expand WHP’s portfolio and add to its holdings. “There is a very high probability we will acquire another brand this year,” he said. “The environment is in such a mode of disruption, all you have to do is walk around a mall today to find an acquisition target.”
Although Authentic Brands Group and Marquee Brands, among others, are also active in the brand acquisition market, Shmidman believes WHP’s experienced management team and solid financial footing will allow it to succeed.
“We increased our commitment to WHP because we believe the company is strongly positioned to take advantage of attractive acquisition opportunities in the market,” said Thomas Casarella, managing director at Oaktree and a founding member of the WHP board. “We look forward to continuing our partnership with Yehuda and the team as we build the platform.”
Shmidman said brands that appeal to him include large-scale businesses with sales in excess of $500 million that are “stuck in situations that do not allow them to expand to their fullest.” The brands need to be healthy, not distressed, and ripe for both global and e-commerce expansion.
He said fashion brands with multiple categories that have positioned themselves as lifestyle players are tops on his list. “If they’re only established in one area or they’re new or emerging brands, they’re not for us. But if they’re brands like Anne Klein and Joseph Abboud that have been around for generations, then we’re uniquely focused on expanding them.”
He said WHP remains “pretty selective and very disciplined” about which brands it will consider acquiring. “We pass on far more than we pursue,” he said. But once brought into the fold, “we invest very heavily.” He pointed to the licensing deals he has signed already for Anne Klein that include cold-weather goods, accessories and denim. WHP has also expanded the brand’s presence in key markets outside the U.S., including China and Mexico.
“You’ll see that with Joseph Abboud as well,” Shmidman said. The deal to purchase the trademark from Tailored Brands Inc. for $115 million was finalized on Wednesday. As reported, Tailored Brands will use the proceeds for debt repayment, “which will strengthen our balance sheet and provide additional financial flexibility to invest in our customer-facing transformation strategies,” the company said Thursday.
Shmidman said he has been “actively in discussions” with the designer Joseph Abboud about a possible return to the brand, and although there is “nothing to announce yet, on a personal level, he’s just terrific, a wealth of knowledge and has an optimistic and beautiful view of life.”
In terms of the brand itself, Shmidman said the licensing deal he entered with Tailored Brands for the exclusive rights to sell and rent Joseph Abboud branded apparel and related merchandise is the U.S. and Canada, will be “core” to the business. He spoke highly of Dinesh Lathi, the ceo of Tailored Brands, and looks forward to working closely with him and his management team to further expand the business.
Beyond that, he said he has a “new plan” for the high-end Joseph Abboud Collection that he is not yet ready to reveal, and said the factory in New Bedford, Mass., that produces that line and is still owned by Tailored Brands will continue to operate. “So Made in the USA is alive,” he said.
WHP is also working closely with Onward Kashiyama, which has been a licensee of the Abboud brand for 24 years. “They have over 90 stores and shop-in-shops in Japan with more opening,” he said.
He also plans to bring the brand to other parts of Asia, the Middle East, Europe and Latin America.
“We’re on a journey,” he said. “And we’re in the very beginning part of that journey to build a portfolio of strong, great brands.”