PARIS — A new contender has emerged in the race to invest in Proenza Schouler, WWD has learned.
According to sources, Castanea Partners is in talks to a take a stake in the buzzy New York brand.
It’s understood Andrew Rosen, John Howard and other investors are in agreement to tender the 50 percent Proenza stake they jointly acquired in 2011 from Valentino Fashion Group and others.
Castanea is a private equity firm that typically invests between $15 million and $75 million of equity in consumer brands and marketing services companies. Its current portfolio includes Drybar, Donald J. Pliner, Thyme and Ippolita. Last September, it added Aurora Brands, the owner of Jay Strongwater, a home and personal accessories brand, and MacKenzie-Childs, a home furnishings and personal accessories brand.
The latter investment was the first for Ron Frasch, who in February 2014 became chief operating officer of Castanea. The former president and chief merchandising officer at Saks Fifth Avenue was hired to assist Brian Knez and Rob Smith, the founders of Castanea, in identifying new investment opportunities. Frasch’s focus is on the luxury space, which includes apparel, accessories, footwear and jewelry.
The likelihood of a Castanea deal with Proenza Schouler could not immediately be determined. Howard declined comment, as did Castanea.
LVMH Moët Hennessy Louis Vuitton had been the front-runner to partner with New York-based fashion house.
WWD was the first to report in August 2014 that the French luxury giant was in talks to add the young New York design duo of Jack McCollough and Lazaro Hernandez to its growing stable of young designers, which include shoe guru Nicholas Kirkwood, London-based fashion house J.W. Anderson, and Milan-based designer Marco de Vincenzo.
It is understood on-again, off-again talks with LVMH recently tapered off anew.
Rosen is said to be driving the Proenza divestment, preferring to focus on the fast-growing contemporary businesses Theory, Helmut Lang and J Brand, part of the Link Theory subsidiary of Japanese fashion giant Fast Retailing Ltd.
Hernandez and McCollough have been darlings of the New York fashion scene practically since launching the label based on their mothers’ maiden names in 2002 at age 23. Named CFDA Womenswear Designer of the Year award three times, the designers were also the first recipients of the CFDA/Vogue Fashion Fund in 2004. Industry sources estimate the size of the business in the $85 million area. Proenza Schouler ships its collections to more than 250 points of sale across more than 20 countries, and operates tight network of their own stores — nine in total.
The designers were recently named one of the WWD Six powerhouse brands of tomorrow. In an interview for that issue, they were asked whether a $1 billion business was their goal. Hernandez said, “Our partners and investors want us to keep growing and growing and growing. It’s the way people run businesses today. You don’t plateau — ever.”
They admitted they were looking for more investment in order to continue to grow, with the goal of expanding into men’s wear and fragrances. As for being only minority owners, they said the most important thing was to retain creative control and know their investors. “I think most of [our investors] realized that if they let us do what we do, they’re going to have a return,” Hernandez said. “The wrong thing for them to do would be to clip our wings. We haven’t let anyone down yet.”
