NEW YORK — Seventh Avenue firm Jump Design Group is on the prowl for brands to buy, and Cathy Daniels represents its first acquisition under new chief executive officer Ashesh Amin.
Amin joined the company last November, and the transaction is part of a new two-pronged strategy formulated by the ceo to digitize the technological platform at Jump Design and make more acquisitions.
The company’s business has two components. Half is focused on fast fashion and domestic production that follows a speed-to-market model, and the other half is a dress business that follows the more traditional process where the design and production can stretch out over six or seven months.
Amin is moving to digitize the company’s platform to improve the manufacturing process so all components of the two businesses can work with “technology-based 3-D sampling…change things on the fly on the cutting room floor, and not worry about [order] minimums.” The plan is about three-fourths complete, with full completion expected around November, the ceo said.
Cutting the production time frame will give retailers more time to make better decisions based on data about what’s selling in any given metro market, as well as fine-tune an order based on selling data in a specific distribution channel.
As for the firm’s acquisition strategy, Amin said, “If I had the bandwidth, I would double up to two companies a quarter.”
He’s in the process of building an acquisitions team that would focus on which Seventh Avenue firms to pursue, work on completing a deal and continue with its integration to the Jump Design platform. He’s looking to do at least three or four a year, eyeing businesses with annual volume averaging $10 million to $50 million. “They have to be reasonably profitable, with strong fundamentals,” Amin said, emphasizing that he’s not interested in turnaround situations.
The Cathy Daniels brand fits Amin’s acquisition criteria, and will help the company expand from a dress business into the sportswear market. The different businesses and their respective ties in the department store channel also helps with cross-selling synergies, whether by product or customer base.
Cathy Daniels was founded in 1970 by Herbert C. Chestler, who died in August 2016. His two sons continued the business, but in more recent months had been thinking of retirement, according to Amin. The 48-year-old brand also operates under the name Ecco Bay Sportswear.
Amin, who declined to disclose the purchase price, said he’ll keep the name in operation. “No one wants to build companies and not have their legacy continue. Chestler wanted his legacy to continue,” the ceo said.
Cathy Daniels employees will remain at their current offices, and the plan is for them to move to Jump Design in November, after the current floor plan gets reconfigured for a new design space with the digitized platform in place. Both firms are based in the Garment District.
Amin said he is also close to a second acquisition, but those talks are still in the early stages.
As for future acquisition targets, Amin said there are many good companies still based in the Garment District that are “respectable and profitable.” These firms have been in existence for quite some time, but haven’t made the technological investments required to convert to a tech-driven business. The owners are at the stage where they are ready to retire, providing Jump Design an opportunity to add to its brand portfolio, the ceo said.