Consumer-focused investment manager firm Consortium Brand Partners (CBP) recently acquired a majority ownership stake in celebrity and entrepreneur Reese Witherspoon’s fashion apparel brand Draper James.
As outlined in the agreement, the investment firm will now hold approximately a 70% position of the fashion brand’s ownership while maintaining a collaborative partnership with the existing Draper James management team, led by CEO Erin Moennich, CFO & COO Sarah Foley, and head of design, Kathryn Sukey.
Witherspoon will remain a partner and board member in the business, working closely with CBP to guide its strategic direction and growth.
Inside the deal
Draper James, founded in 2015 by Witherspoon, is known for its design, quality, and meticulous attention to detail.
Based on the deal terms, the brand will continue to be available for purchase on its website and the three retail stores including its flagship location in Nashville, Tennessee. Additionally, the brand will extend its presence globally to the premium department and speciality stores, along with expanding its exclusive RSVP collection with Kohl’s.
Witherspoon says: “Draper James was inspired by a deep personal connection to my roots, my family, and the women who shaped me. It’s been so amazing to see so many women connect with this brand, our products, and our mission to bring a little Southern joy into everyone’s homes and wardrobes. We are excited to join forces with the team at Consortium, who understand our vision as a company and the importance of our community. They are the perfect partners for Draper James as we continue to grow and build this brand and I’m looking forward to this next phase in our journey.”
Here’s why the deal matters
CBP believes the acquisition of Draper James marks a “significant milestone” as the inaugural addition to its portfolio of consumer brands.
The investment firm points out that it is led by industry veterans Cory M. Baker, Michael DeVirgilio, and Jonathan Greller, calling it a “cohesive management team,” with a long track record of partnering with strong brands and leveraging their collective expertise across operations, marketing, and finance to drive growth and success.
Baker, managing partner of Consortium Brand Partners, shares that through this collaboration, CBP plans to expand the brand with new product offerings, across retail, domestically and internationally.
He adds: “We are thrilled to partner with Reese and the entire Draper James team. Draper James is a beloved American brand with a thoughtful aesthetic that has resonated with women across the country.”
GlobalData analyst Neil Saunders holds the same view. He notes one of the reasons Draper James decided to sell a stake in the business is to help the brand expand its presence and distribution.
Saunders continues: “Draper James has been very successful at carving out a niche in the market and has struck some deals with national players like Kohl’s, but the brand has the potential to be a lot bigger. To ramp up it needs investment and arguably some additional expertise. Consortium Brand Partners provides both of these ingredients and so makes for an attractive partner.”
Although CBP is a new company, he adds, the founders have an excellent track record and so provide reassurance. According to him, CBP will ensure there is adequate funding and that the operations are scaled to meet demand.
Key takeaways for the fashion industry
The fashion sector has seen a lot of activity on the M&A front in recent weeks. According to GlobalData’s Apparel M&A Deals Q2 2023 report, there were 89 global apparel sector deals recorded in Q2 2023 which is 41% higher than the previous quarter and 39% higher than the previous year.
M&A presents an array of opportunities for brands and retailers, most commonly, the opportunity to expand across markets or channels. Consortium’s acquisition of the majority stake in Drapers, as GlobalData’s analyst Louise-Deglise Favre points out, will allow the brand to expand its operations.
“While it can be seen as a dilution of the brand’s control on its strategy, it also represents an opportunity for growth thanks to the new liquidity that will be injected into the brand, allowing for the necessary investments required to scale up its operations,” she concludes.
Looking back, it is evident how brands and retailers have been using M&A as an opportunity to expand their customer base, and offerings or to simply drive profit. But time will tell if it is the fame accompanying the image of celebrities that helps ride their brand to success, or is it the strategic decisions and quality offering as was the case with Kim Kardashian’s shapewear brand Skims.
And WHP Global acquired the denim label G-Star Raw with an industry expert adding that it could pave the way for an ambitious global expansion and the brand’s resurgence after its financial crisis in recent years.
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