Today the brand has “massive distribution,” says Falconhead CEO David Moross
By Allison Collins
Private equity firm Falconhead Capital LLC has sold denim brand NYDJ Apparel LLC to Crestview Partners and Maybrook Capital Partners.
NYDJ, headquartered in Vernon, Calif., makes women’s jeans, skirts, tops and other pants. The products are sold through the company’s website and through major department stores. Terms of the deal were not disclosed. The jeans advertise “lift tuck technology,” which NYDJ says can make women look and feel one size smaller.
NYDJ has been backed by New York-based Falconhead since 2008. The firm received a return of three times its invested capital on the deal, according to a source familiar with the transaction. Falconhead focuses on consumer businesses and is also invested in Extreme Fitness Inc., Javo Beverage Co. Inc. and Rita’s Water Ice Franchise Co. LLC. The firm has more than $500 million in capital commitments.
When Falconhead bought the company in 2008, the consumer market was declining rapidly, but the firm still saw NYDJ as a “very valuable little business,” says CEO David Moross. The PE firm brought in Edwin Lewis, who had previously worked as the president of Ralph Lauren’s womenswear division, and the head of Mossimo, as CEO of NYDJ.
“It wasn’t a fashion brand, but we were able to convert it into a lifestyle-aspiration brand that today has massive distribution,” says Moross. During Falconhead’s ownership period the company was rebranded twice - first into Not Your Daughter’s Jeans, a company aimed at women over 50-years old, and then to NYDJ, which is now aimed at women over 20-years old, says Moross.
New York private equity firm Crestview bought Victory Capital Management in February. Maybrook, also a New York private equity firm, focuses on investing in lower middle-market businesses.
Morgan Stanley & Co acted as NYDJ’s financial adviser, and Weil Gotshal & Manges LLP provided legal advice to Falconhead and NYDJ.
The deal comes at a busy time in the consumer goods sector, with recent deals by Bain Capital, which bought a majority stake in outerwear company Canada Goose in December, and Leonard Green & Partners LP’s agreement to buy Lucky Brand Jeans for $225 million, also in December.
Some retail and consumer goods companies have been attracting high multiples, in part because there are few assets for sale, experts say. Moross expects to see consumer deals in 2014 - “We do believe very strongly that there’s a lot of runway in the consumer space - in 2014 we think it’s going to be a pretty robust year,” says Moross.
For more on the retail and consumer goods sector, watch “Retail Companies Attract High Multiples,” read “Boutique Appeal” and “PE Cash Drives Multiples.”