Private Equity Ownership: in or out of fashion?

Author: Amy Collins

This article is taken from the latest edition of Fladgate’s Fashion Update. Please email the marketing team on to be added to the mailing list for future updates.

In July, the Financial Times announced that “Italian fashion is back in vogue with private equity”. This followed the news of Roberto Cavalli’s acquisition by Italian private equity firm Clessidra; Blackstone’s acquisition of a 20% stake in Versace; The Carlyle Group’s investment in ski jacket maker Moncler; and Mayhoola’s buyout of Valentino.

It is understood that the subsequent listing of Moncler on the Milan Stock Exchange enabled Carlyle to recoup six times its initial investment.  Coupled with reports that the luxury fashion market has almost doubled in size from €128 billion in 2000 to roughly €230 billion in 2015 (according to consultancy firm Bain), it is not surprising that private equity houses appear to be taking an interest.

However, it appears that the need to achieve a business turnaround and strong returns on investment in a short period of time does not always sit well with the long-term development of a brand and the creativity that should lie at the heart of all fashion businesses.

The Financial Times reported that in 2012, Tamara Mellon, co-founder and former chief creative officer of Jimmy Choo, a brand that passed through the hands of three private equity owners, complained about private equity firms’ short attention span. “They say . . . ‘We want to hold this long term and we’re going to help you nurture and build this brand.’ The day after signing, they talked about selling the business.”

It has recently been announced that private equity firm Better Capital has appointed turnaround consultancy AlixPartners as a financial adviser to Jaeger following the somewhat unexpected departure of its chief executive Colin Henry.

According to Drapers, whilst Jaeger delivered like-for-like sales growth of 8% in 2014/15, reports suggested that Henry left following a difference of opinion with Better Capital, which wanted to focus on the more mass-market end of the high street, while he believed that this could damage the upmarket quality of the brand.

Colin Henry’s departure from Jaeger was followed by news that the co-founders of Better Capital, Jon Moulton and Mark Aldridge, had brought an “amicable” end to their business partnership, with Mark Aldridge leaving the private equity firm to be replaced by a former Capita executive, Simon Pilling (who will become chief executive).  The Evening Standard reported that “The appointment of Pilling, an operations chief, to the top job signals a move by the group to focus more on squeezing more performance out of its 10 portfolio companies rather than buying new businesses.”

Harold Tillman, who sold Jaeger to Better Capital, has been quoted in the Evening Standard as saying that he is “so saddened at what’s happened there,” …. “so the original Jaeger team and myself are developing a plan to launch our own brand and create the product for the customers Jaeger has left behind.”  He has also offered previously to buy Jaeger back from Better Capital.

Whilst Better Capital would undoubtedly be seeking a significant return on its investment, perhaps recent developments will see the 130 year old brand reverting to private ownership. We expect that brands new to the private equity environment, such as Roberto Cavalli, will watch with interest.

Amy Collins, Partner, Fladgate LLP (

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