Reese Witherspoon’s Draper James ‘brings joy,’ says Consortium Brand Partners founder Cory Baker

Good morning, Hubsters. MK Flynn here with the Wire.

This week marks the launch of the third season of The Morning Show, the Apple TV+ series starring Jennifer Aniston and Reese Witherspoon.

This morning, we’ve got an interview with Consortium Brand Partners, which earlier this month took a 70 percent stake in Witherspoon’s clothing line Draper James. The transaction marks the new firm’s debut deal.

We’ve also got a Deep Dive on a deal from EnCap Energy Transition.

Designing woman
The announcement earlier in September that new consumer-focused private equity firm Consortium Brand Partners had acquired a majority stake in Hollywood multi-hyphenate Reese Witherspoon’s clothing line, Draper James, generated lots of buzz in both fashion and investor circles, writes Iris Dorbian.

Draper James marks the inaugural acquisition for the New York-based buyout shop, which debuted in 2022. The apparel brand’s appeal goes beyond Witherspoon’s celebrity, Cory Baker, founder and managing partner of Consortium, told Iris.

“The beauty of Draper James is that Reese is not the face of the brand,” said Baker. “It doesn’t live and die on Reese herself.”

Founded in 2015 by Witherspoon and named after her grandparents, the brand raised $10 million in Series B funding in a round led by venture capital firm Forerunner Ventures. Early backers included Stone Canyon Industries and JH Partners.

Witherspoon co-founded Draper James with Seth Rodsky, a founding partner of Los Angeles-based growth equity firm Strand Equity and a former agent at CAA.

Draper James draws heavily on the Oscar-winning actress’s southern roots for inspiration. In addition to apparel, the company also sells home décor and accessories. Currently, the brand has three stores, which include the flagship location in Witherspoon’s hometown of Nashville, as well as a popular e-commerce site. The brand also has a presence in retail chain Kohl’s.

Deal talks began after Cathy Leonhardt, a partner and co-head of consumer retail at New York-based investment bank Solomon Partners, reached out to Consortium about Draper James.

”I told her it was on my list,” Baker recalled. “Retail partners told me how this brand was loved. The more we learned about Draper James, the more we liked it. It checked a lot of boxes for us and had all the great storytelling we’re looking for. It’s a strong management team. Reese is even more impressive than you imagine.”

Witherspoon’s achievements include winning an Emmy and two Golden Globe Awards as well as co-founding production company Hello Sunshine, which was sold to Blackstone-backed media rollup Candle Media for $900 million in in 2021.

While Consortium now owns a 70 percent stake in Draper James, Witherspoon retains a minority stake and remains both a partner and board member. The senior leadership team remains intact, consisting of CEO Erin Moennich, CFO and COO Sarah Foley and EVP of design Kathryn Sukey.

Consortium has big plans for Draper James: Topping the list are growth and expansion. As Baker explained, that includes extending the brand’s lifestyle categories and broadening its distribution to other retail outlets.

“This is a brand with designs, patterns and prints that are very unique,” said Baker. “It’s a brand that brings joy; there’s something that is very happy with this business. If you walk into the flagship store, you’ll see that. When Cathy [Leonhardt] called, it was like the universe was speaking.”

Battery power
The rise in demand and decrease in price of battery storage is fueling demand – and deals. In August, EnCap Investments and Apollo agreed to sell Broad Reach’s battery storage business to Engie, a utility company based in La Défense, France. Yorktown Partners and Mercuria Energy Group were also involved in the sale of Broad Reach.

To learn more about the deal, Rafael Canton spoke with Shawn Cumberland, EnCap Energy Transition managing partner.

The exit was EnCap Energy Transition’s second sale of a battery company in less than a year. The Houston-based firm, along with Yorktown and Mercuria, sold battery storage developer Jupiter Power to BlackRock in a deal announced in November 2022.

EnCap also was the original owner of Broad Reach before selling a 50 percent stake to Apollo in November of 2021.

“Our modus operandi, the way we invest, is to build portfolio companies that are in the infrastructure part of clean energy,” said Cumberland.

The two exits reflect a key point in EnCap Energy Transition’s strategy. The team guides an investment early on with equity but if the company grows, it’s only natural that the firm sends the company to a mega fund with deep pockets.

“These things require billions of dollars, so it runs out of our capability,” Cumberland said. “We create companies that are going to be capital hogs. And then somebody big has to buy them and keep it going. That’s the next part of this evolution.”

That’s all for today. Obey Martin Manayiti will be with you tomorrow, and I’ll be back with more on Monday.

In the meantime, Happy New Year to everyone celebrating Rosh Hashanah!

All the best,

MK