Vilebrequin acquired by G-Iii Apparel Group

G-III Apparel Group agreed on 7 August 2012 to acquire Vilebrequin from Fashion Fund I, a Netherlands private equity fund, for an enterprise value of €50–150M. The consideration comprised a further c.20 million payable against performance targets over the three years to December 2015. The deal was funded from a syndicated facility arranged by a group led by J.P. Morgan Chase and including Bank of America, HSBC and Wells Fargo. Founded at Saint-Tropez in 1971, Vilebrequin designs and sells men’s swimwear and resort clothing, identified by the printed swim shorts on which its reputation rests. It operated 185 points of sale, 60 of them its own and 125 franchised, with France its largest market at 20 shops ahead of the United States at 16 and Italy at 13. Revenue reached €25–50M in 2011, derived principally from the United States and Europe, with roughly 85% from swimwear and 95% from men’s products. Ownership rather than licence explains the purchase. The acquirer derived most of its revenue from brands it did not own, under agreements that expire and can be withdrawn, and an owned label provides margin and control that a licence does not, which is what the analyst commentary at the time identified as the principal weakness of its model. The price was judged aggressive against the size of the business, reflecting what the acquirer intended to make of the brand rather than what it then earned. The seller declined to disclose earnings, describing the business as profitable with substantial operating margins. Roland Herlory, previously managing director of Hermès for Latin America and the Caribbean after twenty-three years with that house, became chief executive from 1 September, with Christian Blanckaert, chairman of Petit Bateau and a director of Moncler, chairing a newly formed advisory board. Zaza de Brito remained creative director, a position she had held for fifteen years. Development was directed at women’s clothing, then confined to a small European range, and at Asia and Latin America, where the brand operated two shops in Hong Kong, one in Macau and franchises in Mexico and Brazil.