In the latest in a continuing series of acquisitions of premium denim companies this year, Crestview Partners has agreed to buy NYDJ Apparel LLC and has reportedly enlisted former VF Corp. chief executive officer Mackey McDonald to serve as the brand’s chairman.
This story first appeared in the December 16, 2013 issue of WWD. Subscribe Today.
Edwin Lewis, who has served as chairman and ceo of the company since its 2008 acquisition by New York-based private equity firm Falconhead Capital LLC, will reportedly leave the firm upon the close of the deal. Lewis also has a stake in NYDJ that will be sold to Crestview and its partner in the transaction, Maybrook Capital Partners.
The parties declined comment on either the purchase or McDonald’s involvement. However, market sources told WWD that McDonald, who’s been a senior adviser to Crestview since retiring from VF in 2008, was the choice for the post. The identity of the new ceo is expected to be revealed upon the closing of the transaction.
Financial details of the transaction weren’t disclosed, although reports from Moody’s Investors Service and Standard & Poor’s Rating Services said a $150 million term loan and $50 million second-lien term loan were secured to finance the arrangement, which would also include equity investments from Crestview and Maybrook.
Falconhead reportedly paid about $100 million for the company five years ago, when its sales were about $80 million, and had attempted to sell it at auction in 2011 for more than $300 million. Sales this year are estimated to be about $200 million, according to market sources and a report from Moody’s.
The deal would be the first for Crestview in the fashion sector.
McDonald had a 12-year run as ceo of VF during which it was transformed from a manufacturer of Wrangler and Lee Jeans and several innerwear labels into a brand portfolio powerhouse that this year is expected to hit $11.5 billion in sales, ranking it as the largest U.S.-based apparel firm. Brands brought in during McDonald’s tenure and since under his successor, Eric Wiseman, include The North Face, Vans, Seven For All Mankind, Nautica and, most recently, Timberland.
Since he retired, McDonald has served as a director of Wachovia Corp., Wells Fargo & Co. and Tyco International Ltd. in addition to numerous civic and philanthropic commitments.
Based in Vernon, Calif., NYDJ, originally known as Not Your Daughter’s Jeans before a re-branding effort overseen by Lewis, has carved out a lucrative niche among women generally aged 35 and up who’ve sought the sexiness of the skinny jeans favored by teens and young adults without the fit constraints. The company has boasted that its “Lift Tuck Technology” helps women look and feel a size smaller and enlisted Helena Christensen for a fall 2013 ad campaign, its first on television, dubbed “Walk in Beauty.”
Acquisition activity has been heated in the premium denim market for the entire year. Last week, Fifth & Pacific Co.’s Inc. sold Lucky Brand to Leonard Green Partners for $225 million, while Joe’s Jeans Inc. acquired its City of Industry, Calif., neighbor, Hudson Jeans, for $97 million in October. Earlier in the year, TowerBrook Capital Partners bought True Religion Apparel Inc. for $835 million and Silver Jeans parent Western Glove Works acquired Simply Blue, marketers of Jag Jeans and Christopher Blue denim, from W Diamond Group.
And denim acquisitions — outside the premium area — might not be done for the year. The Jones Group Inc.’s jeans brands, including Gloria Vanderbilt and L.E.I., might be close to being sold to Sycamore Partners along with the rest of the company.