Anne Klein acquired by WHP Global, a new brand management platform – WWD
WHP Global today launched a brand management platform led by Chairman and CEO Yehuda R. Shmidman and backed by a $200 million equity commitment from funds managed by Oaktree Capital Management.
The company’s first acquisition is Anne Klein, the global fashion brand, which it purchased from Premier Brands Group for an undisclosed amount. Anne Klein generates over $700 million in global retail sales with products distributed by Steve Madden for shoes and handbags; Kasper Group for women’s sportswear; The Jewelry Group for jewelry and E. Gluck for watches.
Shmidman, former CEO of Sequential Brands Group, is the founder of Wave Hill Partners, a business development consultancy, and serves as vice president of parent company Toys ‘R’ Us.
WHP Global seeks to acquire and manage multiple global consumer brands, leveraging a shared platform to achieve large-scale competitive advantages and fuel growth for each brand in its portfolio. The company plans to deploy up to $1 billion in capital over the next five years.
“The seismic changes in the retail industry have created a unique opportunity for us for a new platform,” Shmidman said. “With the strength of Oaktree, we have the pipeline, the team and the capital to capitalize on this opportunity and this scale.”
Oaktree, a global investment manager specializing in alternative investments, has $119 billion in assets under management. WHP Global, based in New York, will initially have more than ten employees.
Discussing the type of acquisitions WHP Global will seek, Shmidman told WWD, “We love fashion and related fields.” He said they are interested in all consumer products, apart from food, such as fashion, home, accessories, housewares and beauty.
“Three to five years ago, we were living through the retail storm. I think what is so unique is that right now we are the beneficiaries of this disruption. Because of this disruption that has taken place, there are so many big brands that need new ownership and new investment,” Shmidman said. He said he was more likely to look for a well-known and mature brand than a newcomer. “We’re not looking for the next big idea, but strong brands that we think we can grow,” he explained.
As for his criteria, he said, “The brand really needs scale, which lends itself to brands that have been around for a little while. We also need strong awareness. And the third element is that there is an opportunity to unlock growth,” he said. This could be through global marketplaces or digital or e-commerce channels. “If he has that mix, we’re most definitely interested,” he said.
The strategy will be to acquire brands rather than license them, Shmidman said. Once WHP owns the brand, it will license the categories. “I don’t foresee us going into manufacturing,” he said. “Our primary interest is in investing capital, acquiring brands, and then growing those brands,” Shmidman said, adding that he’s been involved in many conversations with companies. It plans to acquire a second brand later this year.
Throughout his career in brand management, Shmidman has raised and invested nearly $2 billion in institutional capital across fashion, home entertainment and consumer brands. Some of his biggest acquisitions at Sequential included Martha Stewart, Jessica Simpson and Joe’s Jeans.
“With a strong track record in successfully identifying and growing global consumer brands, Yehuda and his team are the right partners to build WHP and develop a strong portfolio of consumer brands, optimized to work in the retail landscape. retail today, as well as into the future,” said Thomas Casarella, Oaktree CEO and WHP Board Member.
Ted Crockin, Oaktree Vice President and WHP Board Member, said, “With her extensive heritage and strong sales base, Anne Klein is the ideal brand to launch the WHP portfolio.
As part of WHP, Anne Klein seeks to drive growth with key retailers in the United States, including Macy’s Inc., as well as identify new categories and expand globally. WHP plans to invest significantly in marketing, social media and digital commerce to increase brand engagement.
Shmidman sees global expansion as a key opportunity for the Anne Klein brand. Growth areas include Asia, Latin America and the Middle East. “The brand is already established in Korea. But what about China, India and Japan? There are a lot of advantages,” he said.
Anne Klein has deals in place for categories including sportswear, jewelry, shoes, handbags, eyewear and watches, Shmidman said.
Ralph Schipani, CEO of Premier Brands Group Holdings, said: “The Anne Klein brand is in safe hands and we are delighted to continue our involvement as a long-term licensee for several categories, including sportswear and jewelry. The divestiture aligns with our goal of being a premier wholesaler of women’s apparel, jeans and accessories to major US and international retailers.
Premier Brands Group, formerly Nine West Holdings, Inc., is a leading manufacturer of jeans, women’s apparel, accessories and licensing. Its brands include Gloria Vanderbilt, Kasper and Napier. Nine West Holdings emerged from bankruptcy in March and changed its name to Premier Brands Group Holdings.
Schipani said the reason the company wanted to sell Anne Klein was to focus on its other businesses, including One Jeanswear Group, Kasper Group and The Jewelry Group. “We wanted to focus our efforts and energies on operations. We felt like handing over Anne Klein to a partner who would take her in the direction we want her to go was an important next step for us,” Schipani said.
Kasper and the Jewelry Group will be fired from Anne Klein, now owned by WHP. “They [WHP] will own the Anne Klein brand, they will set the brand strategy and do all the marketing and around, and we will be one of their main licensing partners who will manufacture products for them in the field of fashion and jewelry” , said Schipani.
Anne Klein is currently distributed in stores such as Macy’s, Belk, Lord & Taylor and off-prices such as TJ Maxx and DSW (Steve Madden owns the Anne Klein license for handbags and shoes), a-t- he declares. When asked if they were planning to do Anne Klein Jeans in One Jeanswear Group, he replied: “We are in discussion with them.
Premier does not intend to make any further acquisitions.
“Our strategy and focus will be on licensing brands and finding other brands to put on our platform. Not that we stop buying them, but I think it’s more of a game licensed as an acquisition game,” Schipani said.
Anne Klein, a label founded in 1968, has had many incarnations throughout its history. The late Anne Klein championed classic, casual workwear that catered to the modern woman. The brand – which over the years has been designed by Klein, Donna Karan, Louis Dell’Olio, Richard Tyler, Patrick Robinson, Ken Kaufman and Isaac Franco, and Charles Nolan, among others – is known for its separates and clothing that could be mixed and matched for the changing lifestyle of the modern woman.
In connection with the Anne Klein transaction, Pryor Cashman LLP, Kirkland & Ellis LLP and Boies Schiller Flexner LLP served as legal advisors to WHP and its affiliates, and Guggenheim Securities and Kramer Levin Naftalis & Frankel LLP served as financial and legal advisors, respectively, to Premier Brands Group.