Raising Finance

The fashion brands you might not know are private equity owned

6 min read

14 April 2016

On the back of American investment firm Warburg Pincus snapping up a majority stake in clothing business Reiss, we look at higher end fashion brands that are contained within private equity portfolios.

For a number of years the fashion sector has been one investors have flocked to in droves, despite a couple of stormy exits after consumers turned their backs on luxury goods during the financial crisis. The marriage of cash and style has brought teetering retailers back from the edge as well as injecting glamour into portfolios otherwise dominated by industrial and financial firms.

Here’s the Real Business lowdown on who swooped down on which fashion brands, and how the relationship fared.

Seven that are currently at the beck and call of private equity backers

Reiss
Investor: Warburg Pincus
Deal value: Undisclosed
When it happened: 2016

The affordable luxury brand that started off as a menswear company is popular with the Duchess of Cambridge and garnered sales of £146m in 2015. Just a few years shy of its 50th birthday, the chain was still in the hands of its original owner until the recent agreement, and David Reiss will remain chairman and CEO of his eponymous firm. With Warburg Pincus boasting more successful initial public offerings with its companies than any other global private equity firm, he can be sure it’s in safe financial hands.

Dr. Martens
Investor: Permira
Deal value: £300m
When it happened: 2014

Now crowned with the dubious honour of being one of the only things worn by Miley Cyrus in the video for Wrecking Ball, the Dr. Martens brand was originally created by a German doctor who wanted boots more comfortable than the standard army-issue ones he’d been given. It was bought by Permira in 2014, and the relationship seems to be working so far – sales rose by 13 per cent in the first full year of private equity ownership.

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Jack Wills

Jack Wills

Investor: Inflexion
Deal value: Undisclosed
When it happened: 2007

Since being acquired in 2007, the quintessentially British retailer has gone from sloaney secret to global brand. Yet despite the fact its clothing has been sported by Prince Harry, it hasn’t been an entirely smooth ride for the chain, with founder Pete Williams returning to the helm in August 2015 after a failed flotation. The brand’s Chelsea flagship store closed its doors last year, but it continues to pursue international expansion.

Jaeger 
Investor: Better Capital
Deal value: £19.5m
When it happened: 2012

Competing in the same high street luxury segment of the fashion market as Reiss, 128-year-old Jaeger has been less successful in recent years. Owner Better Capital – which acquired it in 2012 – tried and failed to jettison the ailing retailer at the beginning of 2016 after receiving offers £5m lower than than expected. The financiers are now resigned to holding on to the brand for another two years.

Kurt Geiger 
Investor: Cinven
Deal value: £245m
When it happened: 2015

London-based investor Cinven acquired the footwear retailer from a US private equity investor as shoppers flocked to the chain’s 80 stores and 240 concessions to do their Christmas shopping at the end of 2015. Kurt Geiger now sits in a portfolio alongside popular high street names including William Hill and Fitness First, adding an upmarket twist to the collection of investments.

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Fat Face
Investor: Bridgepoint
Deal value: £360m
When it happened: 2007

Fat Face’s private equity owner had to abandon plans to IPO the lifestyle clothing brand when market appetite for flotations in 2014 started to look seriously weak. The retailer – which originally sold t-shirts in ski resorts – has been owned by Bridgepoint for almost a decade, and its backers are currently trying to introduce it into the US market.

Pepe Jeans & Hackett
Investor: L Capital Asia
Deal Value: Undisclosed
When it happened: 2015

With the two brands stocked in over 6,000 outlets worldwide, the company was an obvious target for L Capital Asia, the private equity arm of global luxury goods conglomerate LVMH. Spanish jeans label Pepe and classic British menswear brand Hackett were added to the portfolio in 2015, joining Australian swimwear maker Seafolly and Taiwanese beauty brand Dr Wu.

And one that’s been through the ringer and out the other side

Jimmy Choo 
Investors: Lion Capital, Towerbrook Capital Partners, Phoenix Equity Partners

To say founder Tamara Mellon’s experience with private equity was a negative one is an understatement. Her luxury shoe label has seen stakes acquired and disposed of three times, but having described her investors as “sociopaths”, “monsters” and “vultures who you to the wolves when they exit”, it doesn’t sound like she’ll be doing another deal any time soon.

In keeping with high-end fashion, lovers of fine watches will be ensured even more luxury when wearing premium brands as MasterCard plans on powering payments on pricey timepieces.