Luxury Men’s Apparel Group, owner of Hickey Freeman and Samuelsohn, continues to expand its reach in the upscale men’s wear market.
The Toronto-based company has acquired Lipson, a top Canadian dress shirt company that produces both branded and private label merchandise. Terms were not disclosed.
Lipson’s top customers are Harry Rosen and Holt Renfrew in Canada. Stephen Granovsky, chief executive officer of LMAG, said the plan is to quickly develop the brand in the U.S. market.
“Lipson is very well known in Canada and by industry insiders,” he said. “But it’s not a significant brand in the U.S.”
Granovsky said LMAG has been seeking to buy a dress shirt brand with its own manufacturing capabilities for at least two years but several deals failed to come to fruition. Lipson, which was founded in 1958 by Ted Lipson and is being run by the third generation of the family, was seeking an exit strategy and LMAG came around at the right time.
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Lipson has a factory in Toronto that employs more than 60 artisans and machine operators. Granovsky said LMAG will invest “significant cap ex” in the factory to improve its operation and efficiency. Once that is completed, Lipson’s European cotton dress shirts will be aggressively marketed in America under its own name as well as a private label producer. “It’ll probably take three to six months,” he said. “So we’ll have a soft launch in July, but it’ll really take until January for fall 2018 sales.”
Lipson shirts retail for $175 to $225, but Granovsky said the prices will be lowered to the “$150 to $175 range” in order to gain market share. The primary competitor is Eton, he said, whose dress shirts dominate the luxury market and retail for around $250 and up.
In addition, Lipson will produce dress shirts for Hickey and Samuelsohn. “We want to further develop our core brands and control what they look like,” he said. “We were attracted to Lipson because they have a relatively updated factory from an equipment perspective and they’re in Toronto, which gives us an advantage in the U.S. since the Canadian dollar is weak right now.”
He said Lipson has sales of around $5 million today and “we think it can be $15 million to $20 million at wholesale in the next few years,” he said.
In addition to expanding LMAG’s own brands, Lipson will be the primary supplier to Trunk Club for its custom shirt offering, he said, a contract that would cover some 30,000 to 40,000 units. Hickey Freeeman’s factory in Rochester, N.Y., recently inked a deal to produce custom tailored clothing for the Nordstrom-owned division.
The Lipson family will not be involved with the brand going forward, Granovsky said. Instead, Paul Lindzon has joined the company as an investor and will serve as president. In addition, D’Arcy St.Pierre, formerly a senior executive at ShirtFit, will join Lipson as executive vice president. Lui Sguazzin has remained with the brand and has been promoted to vice president of sales.
The Lipson acquisition is one of several Granovsky expects to make in the next few years. “As tough as this market is in retail, it’s great for the acquisition business,” he said. “This is the most deal flow I’ve seen in years.”
He said the criteria for LMAG to make a deal is that the brand must be focused on North America, produce men’s clothing or sportswear and be positioned at the luxury end of the market. Top candidates would be brands with their own factories, those that specialize in shirts or the direct-to-consumer custom clothing business. “We don’t want to get too far afield,” he said.