Select Page
Montreal's Gildan to Acquire Bankrupt Teenage Fashion Icon American Apparel for $66M

Montreal's Gildan to Acquire Bankrupt Teenage Fashion Icon American Apparel for $66M

In August 2016, American Apparel was said to have hired investment bank Houlihan Lockey to explore an exit, as reported by ExitHub at the time. However, by November American Apparel voluntarily filed for Chapter 11 bankruptcy protection once again. The bankruptcy court may require American Apparel to hold an auction for its assets and business under which the proposed acquisition would constitute the initial bid. Consummation of the acquisition would be subject to Gildan being selected as the successful bidder in any such auction and bankruptcy court approval. Gildan will be entitled to a break-up fee and certain expense reimbursements if it does not prevail as the successful bidder at any such auction. The American Apparel brand would represent a complementary addition to Gildan’s portfolio of brands. The acquisition would create revenue growth opportunities by leveraging Gildan’s extensive distribution network in North American and international printwear markets to further increase the brand’s penetration in the faster growing fashion basics segments of these markets. In addition, with American Apparel’s strong heritage as a consumer brand, Gildan said it will evaluate potential wholesale opportunities for leveraging the brand within its Branded Apparel business. Gildan is a leading manufacturer and marketer of quality branded basic family apparel, including T-shirts, fleece, sport shirts, underwear, socks, hosiery, and shapewear. The company sells its products under a diversified portfolio of company-owned brands, including the Gildan, Gold Toe, Anvil, Comfort Colors, Alstyle, Secret, Silks, Kushyfoot, Secret Silk, Peds, MediPeds and Therapy Plus brands. Sock products are also distributed through the company’s exclusive U.S. sock license for the Under Armour brand, and a wide array of products is also marketed through a global license for the Mossy Oak brand. The company sells its products through two primary channels of distribution, namely printwear and retail markets. Gildan distributes its products in printwear markets in the U.S., Canada, Europe, Asia-Pacific, and Latin America. In retail markets, the company sells its products to a broad spectrum of retailers primarily in the U.S. and Canada and also manufactures for select leading global athletic and lifestyle consumer brands. Gildan owns and operates vertically-integrated, large-scale manufacturing facilities which are primarily located in Central America, the Caribbean Basin, North America, and Bangladesh, with over 48,000 employees worldwide.]]>

Permira to Acquire German Fashion Retailer Schustermann & Borenstein from Ardian

Permira to Acquire German Fashion Retailer Schustermann & Borenstein from Ardian

Permira, together with Cinven and Mid Europa, recently acquired Poland-based Allegro Group from Naspers Ltd (JSE: NPN.SJ) (LSE: NPSN) for $3.25 billion, as previously reported by ExitHub. The consumer technology industry is a key area of focus for Permira which has significant experience in backing global brands, such as Hugo Boss, Valentino and Dr. Martens, and supporting the expansion of leading global technology companies like Informatica, TeamViewer, P&I and Magento. Wolfgang Pietzsch, Managing Director Mid Cap Buyout at Ardian, added, “We are very happy to have supported Schustermann & Borenstein and its founding families for more than four years. Significant growth has been achieved through a multitude of avenues in the company’s stationary and online business both organically, such as a new store opening in Vienna and the internationalization of the online business, as well as through an acquisition in Switzerland.” The deal, which is subject to regulatory approvals, is expected to close in the fourth quarter of 2016. In the past 30 years, the Permira funds have made over 200 private equity investments in five key sectors: Consumer, Financial Services, Healthcare, Industrials and Technology. Permira employs over 200 people including 130 investment professionals in 14 offices across North America, Europe and Asia. Founded in 1985, and operated under the Schroder Ventures brand until 1997, Permira advises funds with a total committed capital of €31 billion. Ardian, founded in 1996 and led by Dominique Senequier, is an independent private investment company with $60 billion in assets managed or advised in Europe, North America and Asia.]]>

@LVMH Buys Iconic Rodeo Drive House of Bijan for $122M, at Record $19.4k/PPSF

@LVMH Buys Iconic Rodeo Drive House of Bijan for $122M, at Record $19.4k/PPSF

The Rich. The sale price makes the deal “considerably ritzier” than Chanel’s purchase of its Rodeo store last year for $152 million, or $13,217 a square foot – then a retail record per square foot for California, said the Los Angeles Business Journal. The sale to LVMH is the latest high-profile deal on the Beverly Hills shopping street, which is home to luxury retailers such as Gucci and Prada. Louis Vuitton already has a store near the 6,287-square-foot Bijan building it purchased at 420 N. Rodeo Drive, the Los Angeles Times said. Rodeo Drive ranks second among the most expensive U.S. retail destinations, trailing only upper Fifth Avenue in Manhattan, according to Cushman & Wakefield. The property is fully occupied by Bijan, a world-class fashion house founded in 1976 by the late Iranian-American designer Bijan Pakzad. The exclusive boutique caters to the ultra-high-net-worth international shoppers by appointment-only. Bijan has successfully operated at the property for more than 40 years and is the longest-standing privately-owned designer house on Rodeo Drive. The Bijan building is one of the most-recognizable storefronts in retail. The renowned yellow Rolls-Royce Phantom and the yellow and black Bugatti Veyron (both Bijan limited editions) match the building’s façade and interior and have long been hallmarks of the internationally-acclaimed custom clothier. Born in Tehran in 1940, Bijan migrated to Los Angeles in 1973. His exclusive boutique on Rodeo Drive has been described as “the most expensive store in the world.” Among his clients, Bijan claimed to count five U.S. Presidents – both George Bush and his son, Barack Obama, Ronald Reagan, and Bill Clinton – and other world leaders such as Vladimir Putin, Tony Blair, and King Juan Carlos of Spain. He also dressed other fashion designers, such as Oscar de la Renta, Tom Ford, and Giorgio Armani, and high-profile Hollywood celebrities including actors Tom Cruise and Anthony Hopkins, as well as Walt Disney’s chairman and CEO Michael Eisner. Bijan’s fragrances for both men and women are known for their distinctive circular glass flacon with an open center and a dividing web. When half full, the fragrance fills two separate chambers, seemingly defying the law of gravity that liquid seeks its own level. One of these perfume bottles is featured in the permanent exhibit of the Smithsonian Institution. According to the 2001 Los Angeles Times Calendar Section, the Bijan Perfume and Fashion Business has brought in an estimated $3.2 billion in sales worldwide. Bijan has been married twice. His first wife was Sigi Pakzad, a Swiss-German whom he met while living in Europe in the 1960s. They had one daughter, Daniela Pakzad, and divorced when she was 17. His second wife was Irish-Japanese interior designer and model Tracy Hayakawa. They married in 1986 and divorced in 1995. They had two children together, Nicolas Bijan and Alexandra. She later remarried businessman David H. Murdock. In April 2011, Bijan suffered a stroke, which required emergency brain surgery, but never recovered and died two days later in Los Angeles. The House of Bijan lived on however, without losing its appeal. Holliday Fenoglio Fowler LP (HFF), a unit of HFF Inc. (NYSE: HF), represented the property sellers, reportedly Brooks Caddell Barton Trust and Dominium Management Corp. Dominium is one of the largest and fastest-growing affordable housing owners in the U.S. Brooks Cadell Barton, who died in 2013, was a senior executive at Coldwell Banker International Real Estate and Home Savings of America, after serving as managing publisher of the Hollywood Reporter. He then left the corporate world to become a shaman and spiritual teacher, opening a retreat in Ojai, Calif., and a school called Art of God. The HFF team was led by Marc Schillinger, Bryan Ley and Bill Fishel. “We are thrilled with the record pricing we were able to achieve on our client’s behalf,” Schillinger said. The sale of the Bijan building comes on the heels of the HFF-brokered sale of Runway Playa Vista, as well as high-street retail transactions on Melrose Avenue and Melrose Place, adding to the more than 4.7 million square feet of retail space that HFF has transacted on so far this year in the greater Los Angeles area.]]>

Montreal's Gildan to Acquire Bankrupt Teenage Fashion Icon American Apparel for $66M

American Apparel New Owners Exploring Exit, Hire Houlihan Lockey

Reorg Research. In addition, “The 27-year-old teen retailer, which boasts on its Web site that its togs are ‘Designed, Cut and Sewn in Los Angeles,’ is making plans to pull up stakes and move east — possibly to North Carolina or Tennessee, where the minimum wage is $7.25,” the New York Post reported. American Apparel’s manufacturing is based in a seven-story 800,000-square-foot factory in downtown Los Angeles, where it produces more than 55,000 different products and garments. The company also owns and operates its own fabric dye house, garment dye house, and knitting facility, all based in Los Angeles. According to The New York Times, in 2006 American apparel was “the single largest garment factory in the United States.” The erstwhile fashion empire went “from being the coolest company on the block when it arrived in Britain in 2004,” according to The Guardian, which named American Apparel “label of the year” in 2008, to chapter 11 bankruptcy in October 2015, due to ongoing losses. “The label’s progressive labour standards and high voltage ads made it notorious – from dorm room project to generation-defining brand,” says Dazed writer Julie Zerbo. “After settling in Los Angeles in 1997, Charney began to make waves, challenging the labour standards of the local garment industry by paying higher wages (two times higher than the standard wage at times).” “American Apparel had a very precise identity to uphold: attainable aspiration – those hot, ‘real’ twenty-somethings that appeared in their images,” she added. “They took on larger competitors, such as The Gap, by catering to those experiencing logo fatigue. From early on, Charney eschewed logos – like the brand names his rivals were slapping on most of their t-shirts and sweatshirts.” In December 2014, Charney was forced out after an investigation for misuse of company funds and inappropriate conduct with employees. In January 2016, American Apparel rejected a bid reportedly valued at $300 million from Charney’s backers, Atlanta, Georgia-based family office and independent venture capital investor Hagan Capital Group, and Dallas, Texas-based early-stage venture capital investor Silver Creek Ventures. In February 2016, American Apparel exited bankruptcy and is now privately owned by its creditors under a financial restructuring plan whereby the company converted $230 million in a debt-for-equity swap. The company’s new owners include Standard General, Monarch Alternative Capital, Coliseum Capital, and Goldman Sachs Asset Management. The investor group also reportedly arranged a $40 million loan to help it exit bankruptcy, and injected another $40 million in new debt and equity. The holdings of former American Apparel shareholders, including Charney, became worthless. In February, Charney was said to be starting from the bottom again on a venture that sounds exactly like American Apparel, according to WWD. The new project is backed by Chad Hagan, president of Hagan Capital Group, who backed Charney’s bid to reclaim American Apparel. Hagan reportedly said the new company will make basics for men and women, will manufacture everything in the US, and will focus on wholesale in the early stages. “Sound familiar?” asks racked contributor Cameron Wolf. [caption id="attachment_433333" align="aligncenter" width="1024"]dov_charney Dov Charney, Founder and former Chairman & CEO of American Apparel.[/caption] “What’s important to us now is we’re able to form this new venture and put Dov at the helm and we’re going to do basics again,” Hagan told WWD. “We don’t want to just start with some funny, online brand. We’re going to do what Dov does best and then establish a robust e-commerce system.” “We hope to create a brand that captures the attention of the world. It will be irreverent and authentic.” Charney revealed on PBS during a recent interview with Tavis Smiley about his upcoming entrepreneurial ventures in downtown Los Angeles. “Whatever the past is, it is. I’m moving forward and I’m going to build a world-class company right here in Los Angeles,” the 47-year-old Canadian-born artist and industrialist said. “Long known for edgy, sexually charged advertising and store displays, the company lost its grip on the hottest fashion trends and basic retailing strategy, with stores selling the same goods year-round and factories churning out swimsuits in September,” according to USA Today. Paula Schneider, the new CEO, “has outlined a strategic path to rehab the company’s image through a mix of new marketing, products and store design,” it added. Schneider is an advisor on private equity acquisitions, brand strategies, operations and growth, through her firm Paula Schneider Consulting, since 2013. She’s an experienced senior executive in the apparel/fashion sector, who previously served as CEO and director at Big Strike LLC, a portfolio company of The Gores Group. She’s a former director at J. Mendel, as well as president of Warnaco Swimwear Group and BCBG Max Azria, among others. To understand why American Apparel has declined so spectacularly, take a stroll through Cambridge, Mass. by the Harvard campus, and you’ll notice that, “the store design is exactly as it was 10 years ago,” said racked contributor Elizabeth Segran. “It’s reminiscent of a factory, with stark white walls covered in metal racks and harsh overhead lighting. On the walls are enormous posters that capture the 1970s porn aesthetic: a woman in a sheer triangle bra suggestively stares at the camera on her hands and knees, a woman clad in nothing but legwarmers and panties looks more demure.” “American Apparel’s risqué marketing suggested a raw, empowered sexuality when it first entered the scene. Now it’s inseparable from the troubling exploits of company founder Dov Charney, who was ousted (in 2014) after the board compiled a long list of strikes like sleeping with employees, walking around the factory naked, and masturbating in front of a journalist,” she added. “Another reason these stores are doing so poorly? What was once considered “hipster style” has gone completely mainstream.”]]>