Thom Browne has a new owner.
This story first appeared in the December 4, 2009 issue of WWD. Subscribe Today.
Japan’s Cross Company has raised its stake in Thom Browne to 67 percent as the New York-based designer reverses his reluctance to cede control of his business. Financial terms were not disclosed.
Browne, known for shrunken suits and avant-garde runway shows, first teamed up with Cross last summer when the Japanese company took a 20 percent stake in his company.
Browne generates sales of about $6.3 million worldwide, but has experienced financial difficulties of late, like many independent designer brands. In August, Cross president Yasuharu Ishikawa was blunt about the situation. “If we didn’t support him now, he might have met his end,” he said.
At that time, Ishikawa said he was open to eventually increasing his company’s stake. Browne also said his search for additional capital would continue, and it did. But in the end, Browne was most comfortable moving ahead with Cross, he said.
Throughout the search for an investor, which took nearly two years, Browne insisted on maintaining ownership of his company and his name. Understandably, he feared losing rights to his own name. Although Browne’s change of heart could be taken as a sign of financial straits, he contended it was a testament to his trust in Cross.
“They understand and support how I want to move the brand forward,” Browne said. “I still have 100 percent control of the creative aspects, the merchandising, the marketing, the brand. So I feel comfortable with the partnership and the percentage I still own. The creative control is what matters to me.”
As a result of the transaction, Thom Browne chief executive officer Josh Sparks will leave the company at the end of the month. Sparks was only there since April, but he fulfilled his objectives of bringing in an investor, improving sourcing and expanding the range of merchandise, said Browne.
“Josh helped me to rethink the brand to reach a broader audience, so that people will see us as a lifestyle brand as opposed to a specific fashion brand,” said Browne.
Due to the new ownership structure, Sparks’ successor will have the title of general manager.
Financial and administrative aspects will be operated from the Tokyo office, where Browne and Cross have established an entity called Thom Browne Japan to oversee the brand’s business in Asia.
With this latest injection of capital, they plan to pave the way for growth in other markets, including Europe and the U.S.
“I strongly believe that this partnership will be a great success.…we at Cross have the infrastructure to support and further develop the Thom Browne brand to a much wider international scale while maintaining its identity,” said Ishikawa.
Domestically, Browne said a top priority would be to strengthen the wholesale business with existing accounts such as Bergdorf Goodman and Barneys New York.
Spring orders are already up from a year ago, he said.
“Internationally, there is still tons of potential in Europe,” Browne said. “Of course Japan, and Asia, is a really strong market that we’ll be able to really expand in both in retail and wholesale.” A Thom Browne flagship in Tokyo will open next year.
“We have the resources now to become a true international brand. We can show in Paris, for example, to reach buyers who don’t come to New York. Not in January, but maybe in June,” said Browne.