private equity

LGP and TOPSHOP: Why we care.

By now you've probably heard. LGP has bought a 25% equity stake in TOPSHOP in a move to expand presence in the US. The entire deal was for $805 million almost DOUBLE the amount dealmakers initially thought they were going to get. For fashionistas out there reading this, I'm going to back up and explain who and what LGP is. Leonard Green & Partners is a private equity firm that tends to make significant investments in retailers like Whole Foods, JCrew, Neiman Marcus, PETCO and The Container Store. The firm's involvement is MAJOR since a ton of British brands have tried to come state side, and have failed. For market followers there are two major take aways: 1) with this investment, TOPSHOP is now valued at $3.2 billion and 2) the company is now cash positive and ready to make siginificant investments/acquisitions in other of the Arcadia businesses/companies. In the last year Arcadia (the holding company of Sir Philip Green's companies including Miss Selfridge, Evans, Dorothy Perkins) has seen a pre-tax profit increase of 25%.

And since it's Throwback Thursday, check out an old report I did for the launch of the TOPSHOP store here in NYC. Good times.

The next fashion trend: private equity

roberto-cavalli.jpgRoberto Cavalli SpA is the latest fashion house to embrace private equity, reports CNN Money. The group is latest in a string of designers who are on the P.E. band wagon including Peter Som, Valentino and Hugo Boss. Designer and owner Roberto Cavalli says the company is looking to sell a stake in order to finance its development abroad. Buyers include US and UK funds Permira, Cinven, Carlyle and possibly Blackstone AND according to Cavalli, he's not accepting any offers that value the company below 1.4 billion euros. 1.4 billion euros??? OBVIOUSLY that Cavalli Vodka must be selling REALLY well!!