New Water Capital has acquired the Worth Collection, which operates Worth New York and W by Worth, from L Catterton.
Terms of the transaction were not disclosed.
Worth, a direct-to-consumer luxury fashion brand, sells the majority of its apparel, accessories and footwear in people’s homes, but also sells online and in several showrooms. The company’s 1,000-plus sales associates, who are called stylists, speak the same language as their clients because they live in their communities and attend the same social functions. Worth customers have an estimated household income of more than $200,000 annually, the company said.
“Catterton was at the end of the fund life for Worth and looking to exit,” John Disa, a partner in New Water Capital, said. “Rothschild, which represented Catterton, presented us with the opportunity. This is right in our target of [companies with sales of] $30 million to $300 million. It fell into the category of a business in transition.”
Disa said that the more New Water learned about Worth, the more interested it became in the company. “We were intrigued with the Worth business model,” he said. “It has a very strong management team. Worth made some good investments in technology. When you look at today’s omnichannel approach, people are looking to have a direct relationship. The company is positioned for substantial growth. This is a growth strategy, it’s a well-run, well-managed business. We’ll develop each channel’s strategy for future growth.”
Worth was founded 25 years ago by Caroline Davis, Richard Kaplan and Jay Rosenberg, who will continue to serve as chief merchant. Dave DeFeo is ceo of Worth Collection.
“Our partnership with New Water will provide Worth with the strategic, operational and industry expertise to enable us to further expand our network of over 1,000 stylists and to continue to provide our customers with the latest fashion, quality and selection in luxury and contemporary apparel,” said DeFeo. “This acquisition comes at a time when the retail industry is embracing dynamic change through buy-now-wear-now and direct-to-consumer business models. We appreciate L Catterton’s partnership and counsel over the years, and believe that Worth is now poised to grow further through new investments in digital marketing and technology, while remaining true to our core strengths built over our 25 year history.”
Worth operates showrooms for Worth New York and W by Worth at the Crown building on Manhattan’s Fifth Avenue, and in Chicago. Disa said New Water is looking into the possibility of developing each channel of business, including virtual selling, digital selling and showroom selling. New Water is also weighing new product categories.
“We look at the current offering and where the opportunities are in the market,” he said. “There’s an opportunity to expand the product assortment. We have an opportunity to think long and hard about the Millennial customer. W by Worth is younger than Worth New York, but it’s not the Millennial shopper. The price points are a little lower.”
Other areas New Water is considering include “basic things like the casual and ath-leisure businesses.”
Asked whether freestanding stores are in the offing, Disa said, “Never say never. They have five outlet stores, which are used for clearance. We’ll look into stores and different opportunities and what makes sense for our consumer.”
Disa said New Water’s skills are “aligned with retail consumer products.” He was president of Casual Corner, senior vice president of merchandise planning at Foot Locker, chief operating officer of Lady and Kids Foot Locker and president of global retail at Ashley Furniture. Disa’s partners at New Capital include Mark Becker, formerly a partner at Hammond, Kennedy Whitney & Co.; Brian McGee, former principal of Sun Capital Partners, and Jason Neimark, former managing director of Sun.
New Water bowed last month after raising $406 million for its first private equity fund.
“This is our first acquisition in the apparel space,” Disa said. “The way we work with each of the management teams is that I’ll be the chairman of the company [Worth] and my other partners will be board members along with Dave and Jay.
“My transactional partners worked on Vince and Scotch & Soda at Sun Capital,” Disa added. “We know the retail and apparel space pretty well.”