Jessica Simpson, the singer-reality TV star-designer whose fashion brand flourished under Camuto Group to the tune of $1 billion in retail sales, is changing hands.
This story first appeared in the April 2, 2015 issue of WWD. Subscribe Today.
Sequential Brands Group Inc., has signed a definitive agreement to acquire a majority stake in the Jessica Simpson brand, including the Jessica Simpson Collection master license and other rights, for an undisclosed amount of cash and stock. Simpson, 34, chose Sequential as her new business partner and will continue to own the balance of the equity of her company.
According to sources, Sequential is looking to build Simpson’s empire into a $2 billion to $3 billion operation, with a focus on international growth.
Asked which categories she would still like to add, Simpson said, “It’s humbling to think that we now have 31 product categories in the collection. Together with my mom, Tina, and the rest of the JS team, we are always looking for new ways to reach our consumers. I have a passion for home design, so I’m excited to expand on our home and lifestyle offerings. I also look forward to further developing our e-commerce site and taking our brand all over the world.” She said she’s also eager to have her own freestanding stores both in the U.S. and abroad “where I can dress a woman from head to toe, while offering them a more complete experience of who I am.”
Vince Camuto, the late founder and chief executive officer of Camuto Group, who died Jan. 21, bought the master license for Jessica Simpson in 2005 for $15 million. With the closing of the new deal, Camuto’s master license for the Jessica Simpson Collection has been replaced with a new, long-term license to manufacture and distribute footwear. All of Simpson’s other licensing agreements are expected to stay in place, such as jeanswear with Jones Jeanswear, fragrance with Parlux Fragrances, dresses with G-III Apparel Group and handbags with Trebbiano LLC. Several of the Camuto employees who market the Jessica Simpson brand are moving over to Sequential.
Camuto engineered the growth of Simpson’s brand from footwear into a multicategory celebrity business. Today the brand has 31 product categories, including footwear, apparel, fragrance, fashion accessories, maternity apparel, girls’ clothing and a home line. The line is distributed through such retailers as Dillard’s, Macy’s, Belk, Lord & Taylor and Nordstrom, and has 2,500 points of distribution worldwide.
“I am extremely honored to partner with Sequential Brands Group to continue the growth and integrity of the Jessica Simpson Collection,” Simpson said. “Working together with the powerful management team at Sequential and with all of our trusted retailers and licensees, including Camuto Group, there is no limit to our success. I’m as committed as I was 10 years ago. Here’s to the next billion.”
Yehuda Shmidman, chief executive officer of Sequential, added, “Jessica Simpson is an entertainment and style icon who successfully built an incredibly strong fashion brand with best-in-class licensees and leading retail partners.” He said he was happy to partner with Jessica, her team and the brand’s licensing partners, including Camuto Group for footwear. “Together with Sequential’s global activation platform, we believe the brand will continue to grow in current markets and in new markets around the globe.
“The opportunity to become partners with Jessica is unbelievable,” Shmidman told WWD. He said he met with Simpson and her team, and the deal grew organically. “Being in the industry, we’ve had our eye on her and her success and got to know her. I fell in love with the business and the opportunity,” he said.
Shmidman is particularly looking forward to growing the business in Asia, the Middle East and Latin America. At present, the vast majority of the Simpson business is done in the U.S. “We believe there are a number of emerging and mature markets” that would love to have Simpson’s collections, he added. Another area of opportunity would be an e-commerce platform for Simpson, which doesn’t exist yet.
Alex DelCielo, ceo of Camuto Group, said, “We are excited to work with Sequential and to continue working closely with Jessica and the Jessica Simpson brand. We have enjoyed many years of success with Jessica, and we are committed and looking forward to many more years ahead.”
Sequential has received committed financing from Bank of America and GSO Capital Partners LP, an affiliate of Blackstone Group. The transaction, which is slated to close in 90 days, is expected to be immediately accretive. David Levin of David Levin Business Management and Charles Grimes of Grimes LLC were responsible for structuring the transaction on behalf of Simpson and advised her on valuation, intellectual property and licensing matters. Mitchell C. Littman of Littman Kroos LLP advised Simpson on corporate legal matters. The deal team that represented Sequential during the acquisition was led by Tengram Capital Partners. Gibson Dunn advised Sequential on legal matters.
Sequential, a brand management organization, has a portfolio of companies generating $2 billion in global retail sales, which will reach $3 billion once the deal closes. Its brands include And 1, Avia, footwear brand Nevados, Linens-N-Things, Ellen Tracy, Revo, Caribbean Joe, William Rast, The Franklin Mint and Heelys. The company is traded on NASDAQ. For the year ended Dec. 31, Sequential had on a GAAP basis a net loss of $1.1 million versus a loss of $18 million a year ago, on total revenues of $24 million, compared to $12.3 million a year ago.
The Simpson brand was founded and built in partnership with Jessica’s mother and younger sister, Ashlee Simpson Ross, who serves as cocreative director of Jessica Simpson Girls. It launched at the same time Simpson appeared as Daisy Duke in “The Dukes of Hazzard.” In a WWD interview last July, Camuto spoke about the success of the Simpson license. “It was the right time at the right place. It’s almost her 10-year anniversary and she never got into trouble. We gambled with it, but it worked out. We built a whole showroom. When the retailers came in, they were excited about it right from the beginning. The good news is it really works, and so many celebrities have called us, but we don’t like to repeat the same thing twice.”
Simpson’s secret, according to Camuto, is her approachability. “People like her,” he told WWD in 2010.