InterLuxe is still on the prowl for designer brands.
The Lee Equity-backed fashion investor — which now has two deals under its belt, having bought control of Jason Wu and A.L.C. — is actively speaking with four other brands.
And while none of those talks are close to completion and might not end up in deals, they show that although the M&A scene for designer names has been somewhat sleepy, it is still churning away beneath the surface.
Castanea Partners invested in Proenza Schouler in June and Alexandar Wang is said to be in talks with General Atlantic, but otherwise designer and investors are still largely in the courting phase.
InterLuxe cofounder and chairman Gary Wassner said there are more brands out there looking for capital than there are investors and the process of getting to a deal is a slow one.
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“They take such a long time,” Wassner said of the negotiations. “There is so much involved in completing a deal. It’s a lot of diligence on both sides.”
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Wassner, who is also chief executive officer of the factoring firm Hilldun, said there are other brands that are intriguing, but don’t have enough revenues yet to be good investments.
“At $2 million [in revenues, or more], proof of concept isn’t there yet,” he said. “We’re really being very choosy. ”
The deal for A.L.C., a Los Angeles-based contemporary brand built by stylist-cum-designer Andrea Lieberman, has been talked about in the market for months and the brand was said to have been mulled over by other investors as well.
“I have loved the brand since I first saw it,” Wassner said. “I have been financing it for a number of years. People are passionate about it. It built itself on product.”
Wassner noted the brand has never been marketed or held a runway show and has still gained traction.
Melissa Beste, InterLuxe’s ceo, said the investment firm’s money and expertise can help the brand not only boost its marketing, but expand its wholesale business and ramp up its digital, retail and international components.
The idea is to take a concept that is already strong, free up Lieberman to focus on the creative aspects and meet the brand’s potential.
This, in general, is what InterLuxe seeks to do with all the brands it invests in.
“Our goal is to help them realize their vision, not to re-envision it,” Beste said.
InterLuxe’s president, Cliff Moskowitz, added, “We meet with lots of brands that we like, but unfortunately are not the right fit for us.”
His advice for smaller brands looking for funding was to “knock on a lot of doors” and “manage your business in a way that minimizes the capital you might need.”
Moskowitz said InterLuxe’s process begins with the people behind a fashion business and then moves onto the strength of the brand itself.
With four sets of active talks, he said, “If we could make another two investments in the next 12 months, that would be great.”