Wellington Capital Group has bought Harvé Benard Ltd. for $12 million.
After six weeks of negotiations, the New York-based equity group secured rights to the Harvé Benard brand. The impending deal was first reported by WWD on Aug. 29.
But the purchase excludes Benard’s recent acquisition, New Frontier, which Joseph Gabbay, chief executive officer of Wellington Capital Group, called “not attractive at all.”
GarfieldMarks was never part of Harvé Benard, but was owned by several members of Benard’s management, and thus was not part of the sale.
Within two years, Gabbay thinks the Harvé Benard better brand can increase its wholesale volume from $100 million to $500 million. “I believe the brand has major credibility in the marketplace,” said Gabbay. “There isn’t a problem with the brand at all, except the company that owned it ran an exorbitant amount of overhead.”
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Harvé Benard executives could not be reached for comment on Wednesday. Harvé Benard was founded in 1967 by brothers Bernard and Morton Holtzman.
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“We see tremendous potential for this brand,” said Lynn Siemers, the newly appointed president of Harvé Benard. “Harvé Benard is a well-known name with quality associated with it. We are geared up to expand its product offerings.”
Wellington Capital anticipates investing $5 million, and its plans include hiring a celebrity face to represent the brand and adding a “purple label” that will sell for triple the price of the current Harvé Benard product to higher-scale retailers like Saks Fifth Avenue and Nordstrom. The current line wholesales at $25 to $45 for sportswear and $100 to $200 for outerwear, and sells to department stores and midtier chains.
Unlike many financial firms dabbling in apparel, Gabbay said his interest in the industry is long term, and he does not plan to flip Harvé Benard when business improves. “This is something for the kids,” Gabbay said.
Gabbay and Gabriel Shehebar started Wellington Capital about nine months ago “to purchase existing businesses — not just brands, but businesses, as well — that are hurting and that we feel like we could turn around,” Gabbay said. It recently purchased Wormser Co. out of bankruptcy. The brand, which specializes in putting characters on children’s pajamas, has increased volume slightly to more than $30 million in wholesale and signed new licenses under Wellington Capital’s ownership, according to Gabbay.
Wellington Capital’s goal is to acquire more companies in the next seven months. The firm is targeting apparel groups with more than $20 million in volume that own promising brands perceived to be performing at less than their potential.
Tracy Evans Ltd. will be the main licensee for most of the categories in Harvé Benard sportswear. For the most part, Wellington Capital plans to license Harvé Benard’s manufacturing.