Once a limited process, the stake sale of apparel maker Tory Burch has been opened to a wider pool of private equity bidders, peHUB has learned.
The company’s namesake, Tory Burch, and her ex-husband and business partner, Christopher Burch, had originally hired Goldman Sachs to shop the business, but disagreements over fees led the duo to move forward with Lehman Brothers as its sell-side adviser. (Goldman was connected to Christopher Burch; Lehman’s connections were with Tory Burch.)
Women’s Wear Daily reported in July that bidding for the 30% stake had been narrowed to Bear Stearns Merchant Banking and TSG Consumer Partners, though the sale hinged on the firms’ willingness to pay Tory Burch’s steep asking price.
Tory Burch reportedly was selling a 30% stake for $300 million, which valued the company at almost $1 billion — or nearly five times Tory Burch’s 2007 revenue.
A source told peHUB that the report incorrectly identified the bidders—BSMB was competing against Berkshire Partners, not TSG Consumer Partners. Furthermore, two sources said BSMB had struck a deal with Tory Burch as far back as June. By August, with no deal announcement, a source revealed to peHUB the deal’s most recent development: the process has been opened up to more bidders in hopes of finding a suitor willing to pay Tory Burch’s asking price.
Tory Burch isn’t the only upscale women’s apparel company to sit on the auction block this summer. Earlier this month French turnaround firm Change Capital Partners sold German fashion business Jil Sander to Onward Holdings Co, a Japanese apparel maker, for $245 million (€167 million). Not bad for an Ebitda of $8.6 million (€6.1 million). Change Capital made more than 3x their money on the turnaround.
TSG Consumer Partners and Bear Stearns Merchant Banking declined to comment. Tory Burch did not return calls (not surprising, since its Fashion Week).