NEW YORK — Milly, the troubled advanced contemporary brand, has been sold to MMJ LLC, a wholly owned subsidiary of S. Rothschild, the 138-year-old privately held diversified apparel company here.
The deal encompasses Milly’s intellectual property and selected assets, including designs, patterns, samples, fashion books, inventory and the supplier base. Terms of the deal weren’t disclosed.
It was reported earlier this month that Milly was said to be struggling with a cash crunch and slower sales and was in talks with multiple potential investors.
Cofounded in 2000 by Andrew Oshrin and Michelle Smith (who are in the midst of a divorce procedure), Milly generates about $43 million in wholesale volume. The company’s wholesale business at department stores has been challenged over the last two years, and the brand does the bulk of its business with major stores including Neiman Marcus, Saks Fifth Avenue and Bloomingdale’s, as well as Revolve, Shopbop and milly.com.
“They [Rothschild] have the financial wherewithal and strategic setup to reinvigorate the brand,” said Oshrin in an interview Monday.
“We are thrilled to have been in a place to purchase selected assets for Milly,” said Mark Friedman, president and chief executive officer of S. Rothschild. “We don’t want to change the DNA or the aesthetic. We’re here to repair and build it so it’s as good. The product is well-made, stylish and fits well, and we’re not looking to change the quality. Michelle has an unbelievable sense of color, print and bold silhouettes.”
Friedman said the company hasn’t resolved whether Smith, the brand’s creative director, and Oshrin, ceo, will be joining the operation. “We are in discussions with both of the principals as to how we can make this work best, and maintain the integrity and the lifestyle attitude that they built. We would love to have their involvement. They built a great brand,” he added.
Rothschild will start shipping the remainder of the spring line, and then two fall lines. The deal, which was completed last week, includes Milly ready-to-wear, the cabana swimwear collection and Milly Minis children’s wear.
MMG Advisors was the investment banker in the sale process and its role was to facilitate the deal on behalf of all the parties.
According to Oshrin, about 16 to 20 employees, including members of the sales and design team, will be joining S. Rothschild with the Milly brand. Keith Nuss will continue to head sales. The company expects to remain on one of two floors it has occupied at 265 West 37th Street.
Smith couldn’t be reached for comment Monday.
Milly owns and operates several freestanding specialty stores, whose fate hasn’t been determined, said Friedman. However, sources said the boutique at 900 Madison Avenue in New York is expected to close in a few months, and the company’s East Hampton, N.Y., store will shutter at the end of the month. The company continues to have a licensed store in Kuwait.
The company’s online business, which has been a bright spot, grew 72 percent in 2018, according to Oshrin.
Friedman said he’s not concerned about how tough the business has been at department stores for contemporary brands. “It’s challenged and it’s not challenged. There’s a lot of new suppliers in the zone, and there are always new people coming into that age group with that spirit. Michelle has a phenomenal attitude about what her woman wants. She’s able to dress both the mother and the daughter in various outfits she produces. Fashion is impulsive, and if you give them the right things, I think there’s a market out there,” he said.
Historically, two-thirds of Milly’s production has been domestic and one-third overseas. Going forward, Friedman said he plans to use a combination of domestic and overseas production. He said his company has to learn more about domestic production from Milly, since Rothschild is entirely an importer. “We’re not frightened about doing better goods overseas,” he said.
Rothschild manufactures and markets Kobi Halperin, the women’s sportswear brand, and makes outerwear under such labels as Larry Levine, Lauren Ralph Lauren, Izod, Sean John, Mackintosh, Via Spiga and Sam Edelman. It also has the license for Sam Edelman dresses.
Last year, Milly got a boost when Michelle Obama wore one of the company’s designs for her official portrait by Amy Sherald that hangs in the Smithsonian’s National Gallery in Washington, D.C. The designer is known for her use of European fabrics and custom-made prints. In addition to Obama, her designs have been worn by such celebrities as Beyoncé, Gwyneth Paltrow and Kate Middleton.
Trouble at Milly surfaced in the press last month when WWD reported that HL Group sued the company in New York state court, claiming that despite “repeated demands,” Milly still owed it some $113,000 in retainer and consulting fees for work it did over the course of 2018, as well as expenses. There has been no response yet.