Castanea Partners has bought Astor & Black Custom Clothiers, the maker of high-end suits favored by some athletes and corporate executives, from founder David Schottenstein in an all-equity transaction, Castanea executives told Buyouts.
Schottenstein, who launched the company in 2004, will retain a significant minority stake.
The Columbus, Ohio-based company prides itself on making suits with cutting-edge designs and fine fabrics that typically cost $800 to $1,000. Its fans include the likes of National Football League athletes Chad Ochocinco of the Cincinnati Bengals and Dallas Clark of the Indianapolis Colts, and executives such as Larry Ellison, founder of the Oracle Corp., and Bob Walter, founder of Cardinal Health, according to Castanea executives. (Astor & Black does not pay the celebrities for their endorsements.)
Castanea co-founders Rob Smith and Brian Knez told Buyouts the firm was attracted to the company’s growth and a unique business model—more similar to a service business than a typical retail business, they said—which features a small number of employees and no inventory costs.
Astor & Black contracts with fewer than 100 trained salesman, or “clothiers,” who visit customers, take their measurements and suggest fabrics, which come from high-end specialty fabric houses in Italy, England and elsewhere. The salesmen, who are paid a commission, then place the orders, and the suits are made to specifications in China and elsewhere internationally. A local tailor might make final adjustments to the finished product.
“It’s not buying and constructing suits on the hope that you might sell them,” Knez said. “This allows for a working capital advantage that is pretty rare, and customers get something explicitly made for them.”
Bernard Vaughan is a Senior Editor at Buyouts Magazine. Follow his tweets @BVaughanReuters. Follow Buyouts tweets @Buyouts. For information on how to subscribe, contact Greg Winterton at firstname.lastname@example.org.