Stallion Buys Majority Stake in J.Mendel
21-Sep-2015 | By: Lisa Lockwood
NEW YORK — J.Mendel has found a new majority investor, Stallion, Inc., a privately held New York family business. Stallion acquired the stake from Gores Group, the L.A. private equity company.
Stallion will join existing shareholder Gilles Mendel, chief creative officer and fifth-generation family member, who will retain a significant stake in the fashion house.
Stallion is run by luxury furriers Peter and John Georgiades, who are also investors in Dennis Basso. Sources say the Georgiades brothers have been eyeing J.Mendel for some time.
“Stallion Inc. is extremely pleased to be partnering with J.Mendel, a brand we have long admired, and in which we see enormous potential. Our goal is to support its growth as a luxury fashion brand, one with a uniquely rich heritage and refined design sensibility, completely independent and distinct from the other investments in our portfolio,” said John Georgiades, who owns Stallion.
J.Mendel currently generates revenues of about $30 million in its fur, ready-to-wear and accessories business.
“My new investment partners have a deep understanding of the business, as well as a great respect for my creative vision and ongoing direction for the company,” said Gilles Mendel. “Moreover, they offer significant production expertise and capabilities, which will greatly enhance J.Mendel’s ability to create the finest luxury goods here in the U.S.”
Gores had been an investor in J.Mendel since 2010 although WWD reported in September 2013 that it was looking for an investor to further partner in the brand. Last February, WWD reported that J.Mendel had hired BDA Partners and Vendôme Global Partners to find an investor for a majority stake in the brand.
J.Mendel became Gores’ first luxury asset when it bought the brand, but sources said the private-equity firm never invested enough capital to grow the business to significant profitability since it wasn’t a core holding and lost patience with the brand.
During Gores’ ownership, J.Mendel expanded its existing retail locations in New York and Harrods in London, and opened two boutiques under a partnership in Seoul, Korea. The company has also launched handbags and accessories, while refining its global wholesale distribution and expanding its presence in the bridal market.
Marc Durie, president and chief executive officer of J.Mendel, said the company will maintain the same structure and there are no changes planned in management. “We are looking at different opportunities to grow the company,” he said. At present, about 80 percent of the collection is made in the U.S. Durie said he looks forward to expanding the products, footprint and distribution. He said that Stallion plans to keep J.Mendel “separate from its other businesses” and declined to discuss the Basso business.
Currently, luxury furs account for 50 percent of J. Mendel’s business; ready-to-wear is 45 percent, and accessories, which are mostly handbags, account for the balance.
Established in 1870, in Russia, as a boutique specializing in luxury furs, J.Mendel has expanded its fur business into ready-to-wear, bridal and accessories over the past several years, with varying degrees of success. The brand’s eveningwear is often seen on the red carpet, and several actresses, such as Jessica Lange and Joanne Froggatt wore J.Mendel at the Emmy Awards Sunday night. Sources said the business needs capital to grow and a deep-pocketed partner who is willing to invest in the brand long-term. The company also needs to develop its international presence.
Euan Rellie and Justine Mannering of BDA Partners, and Elsa Berry and Louis Fabregas of Vendôme Global Partners, represented J.Mendel in the transaction. Stallion Inc. was presented by Howard Feller of MMG Advisors.