We are only on Tuesday, but already this week there has been four announcements of fashion company sales, both in the USA and here. The main reason for sales is to release equity in the business to pay of loans, debts or to invest in the company’s future, but what ever the reason the fashion business world has been busy.
The newest sale of this week is the Liberty of London store, one of the prettiest buildings in London, just off Regent Street. Selling for £41.5 million, which exceeds the estimated value of £30.5 million by £11.25 million, the property market for high-value areas is increasing, against the grain of the extreme base of the property market.
So why did they decide to sell? Liberty will use the funds to repay bank debt and loans and pave the way for the sale of the business itself. But the company will not be moving anywhere, as the sale is a sale-and-leaseback arrangement, meaning that they will continue to trade from it’s current location, as well as buy it back in sorts.
Though Liberty of London itself may also have new owners as MWB, who owns a 68 per cent share of Liberty, is rumored to be selling to BlueGem Capital Partner, who is chaired by CEO Marco Capello.
The latest Liberty of London Print, which I blogged about here.
The second sale this week is Nicole Farhi, who has been sold to OpenGate Capital for an undisclosed sum. The company, headed up by founder and CEO Andrew Nikou, is moulding itself as a fashion, media and entertainment conglomerate, with Models 1 and the American arm of TV Guide (the handy online listings outlet), as well as Fleurus Presse and Junior Hebdo under its belt.
The label was founded in 1983, a relatively new company against some of the other well known brands, labels and houses that target the middle to upper retail markets. But it is great news that Farhi herself will retain her role as creative director, as the hopes for the buyout is to develop growth for the label, continue its wholesale presence in the USA and to create a a flagship sore in New York. Lets just hope those delicious brunches at the New Bond Street Store will continue to be a Sunday morning refuge.
The third buyout this week is for the online luxury boutique Net-A-Porter, which is estimated to make in excess of £50 million for founder Natalie Massenet. Selling her 18 per cent share to Richemont, who owns Cartier, Alfred Dunhill, Chloe plus many others, Richemont take control of the outstanding 70 percent it didn’t already own, bought from other investors.
But Massenet’s reasons for selling are not clear, but the company is one of the few online success stories, as she began the company with an £850,000 loan and grew the business into one worth more than £350 million. It is a great site that has some of the best pieces available on the web, so lets hope nothing changes at Net-A-Porter.
The fourth, and last, sale of the week is Tommy Hilfiger. This came as quite a shock as I thought it was such a strong, grounded company and that he himself had no interest in selling again.
However, it has been confirmed that Phillips-Van Heusen Corporation bought Tommy Hilfiger B.V – to give it its full name – from Apax Partners L.P for a massive $3 billion (around £1.6 billion) plus $137 million in liabilities.
What is particularly interesting is that the Phillips-Van Heusen Corporation also owns Calvin Klein that has an approximate revenue of $4.6 billion, or around £2.2 billion. Now, that is an investment and a half!
So as you can see, it really has been a few days of real, hard and heavy business. Each company has its own reasons for selling, whether to release equity or to pay of debts. But it seems fashion is booming like there was no recession, job cuts or rising and continued unemployment.
From the independent department stores, such as Selfridges, or conglomerate owned business such as Calvin Klein or Gucci, fashion retail is booming. Selfridges last week announced record profits for the last quarter in luxury accessories, most notably handbags, and the Gucci group has again announced rising profits for the last three months to March.
A Yorkshire man once said, ‘Where there’s muck, there’s brass’ or in today’s view, ‘Where there’s fashion, there’s millions’.