Gap Inc. has agreed to sell Intermix to private equity firm Altamont Capital Partners for an undisclosed sum.
Altamont Capital Partners intends to acquire the entire Intermix business, including all store leases, e-commerce and assets, Gap Inc. said Tuesday. Intermix has 31 store locations in the U.S. and an e-commerce site. Intermix accounted for less than 1 percent of Gap Inc.’s sales.
The $16 billion Gap has been streamlining for years, primarily by closing Gap and Banana Republic stores. Last October, the corporation unveiled its Power Plan 2023 strategy, part of which calls for closing 350 stores in North America between the Gap and Banana Republic by 2023. By that year, about 80 percent of the revenue at Gap and Banana Republic is expected to be driven by off-mall strip outlets and online formats, as the company reduces its brick-and-mortar exposure in traditional malls.
Last April, the company sold off Janie and Jack, a children’s apparel and accessories brand, to Go Global Retail. And last year, the Hill City men’s athleisure brand was shut down.
The San Francisco-based Gap Inc. bought Intermix in January 2013 for $130 million, in an effort to put a contemporary and hipper fashion halo over the company and take Intermix to new heights. On both accounts that didn’t happen. The acquisition was criticized by some as a distraction from what Gap Inc. needed to focus on — fixing its Gap and Banana Republic brands. Each has been in turnaround mode for several years.
“We are committed to driving long-term, profitable growth for our shareholders and employees, while delivering unique product and experiences for our customers at scale,” said Sally Gilligan, head of strategy for Gap Inc. “The sale of Janie and Jack and planned transaction of Intermix demonstrate how we are prioritizing our strategic focus and resources behind the growth and potential of Old Navy, Gap, Banana Republic and Athleta.”
Khajak Keledjian and his brother Haro cofounded Intermix and In 1993 opened the first Intermix boutique in New York City on lower Fifth Avenue. Aside from wanting to cash in on their business, the brothers moved to sell their business to Gap Inc., attracted to the buyer’s impressive infrastructure and ability to support and provide scale to what was then a growing business with cache.
Intermix has been selling such labels as Isabel Marant, Ulla Johnson, Christopher Esber, Alanui, Agolde, Acne and Nanushka, among other designers, and has been distinguished by its assortment, mix of established and emerging designers, and in-store and online stylists. Intermix has also been active on social media, supporting voter registration and other causes.
Altamont, which indicated that it has more than $2.5 billion in capital and 20-plus investments, said a third of the mix at Intermix is exclusive. In consumer products, its holdings include Fox, Hybrid Apparel and Renegade Brands.
“This is an exciting next step in our journey at Intermix to be the leading omnichannel boutique fashion business for women seeking a highly curated and personalized shopping experience,” said Jyothi Rao, chief executive officer at Intermix. “Altamont shares our vision for accelerated growth, best-in-class customer experience and an entrepreneurial team culture. We are entering this partnership with great momentum, and with the investment from Altamont Capital Partners, Intermix will be poised to shape the future of multibrand retail.”
With its purchase of Intermix, it’s possible that Altamont sees an opening in luxury retail in light of the demise of Barneys New York, Jeffrey and some downsizing at the Neiman Marcus Group. Also, store traffic and shopping for fashion has been picking up in recent weeks, with COVID-19 vaccinations rolling out and cities lifting restrictions on social distancing and wearing face masks.
Altamont said it invests in companies with “strong business models that have opportunities for tremendous growth. Intermix is an enviable platform with strong brand identity, an innovative business model and highly attractive customer base. Altamont Capital Partners brings considerable experience partnering with middle-market, omnichannel companies like Intermix, supporting management and providing resources to help them grow and succeed.
“This partnership creates opportunities for Intermix to execute against a long-term plan for sustained success and growth,” said Altamont Capital Partners managing director Keoni Schwartz. “As events and social gatherings become more frequent, Intermix is well-positioned to reemerge as a leading omnichannel fashion retailer and continue to improve its offering and service for its exceptional customer base. We look forward to applying our considerable experience with other carve-outs to support the management team and are excited to be investing in Intermix as they continue to build a compelling, independent omnichannel retailer delivering a best-in-class customer experience.”
BofA Securities Inc. acted as exclusive financial adviser to Gap Inc. on the transaction.