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The new owners of GarfieldMarks, which has changed hands for the fourth time in seven years, think they finally have a winning formula of private equity and strategic partners.
Li & Fung (1937) Ltd., a private investment vehicle affiliated with sourcing giant Li & Fung Group, and Rousso Apparel Group Inc. last month acquired the assets of GarfieldMarks LLC, including bridge and better lines GarfieldMarks and Womyn, for an undisclosed sum. Li & Fung and Victor Rousso, president of his family's $200 million apparel business, bankrolled the buyout of six former Harvé Benard executives who had bought the firm. Rousso Apparel Group is managing the business as operating partner.
"It's a unique transaction in that it is a blend between the private equity world, with Li & Fung, and a strategic deal on our end," said Rousso, who became chief executive officer of GarfieldMarks. "A private equity company can't go into every company because, while they can make an investment in a company, they can't manage their investment. This partnership allows us to widen the scope of businesses we can invest in."
Rousso and Michael Hsieh, president of LF USA Investments Inc., an investment arm of Li & Fung, both individually had been interested in GarfieldMarks, and they were introduced by Andrew Postal of MMG, who orchestrated the deal and saw it as the perfect partnership, Rousso said.
Rousso Apparel Group manufactures moderate and better women's sportswear under the Oleg Cassini, Naturally Organic World and Mifresia labels, among others. Better lines make up about a quarter of its $200 million in sales. The vendor is trying to grow this higher-margin side of the business through more acquisitions like GarfieldMarks, which capitalize on Rousso's back-office operations while keeping the product sides of acquired companies intact.
"A company like GarfieldMarks, the size it is, it is much more costly to stand alone," said Howard Sheer, president of GarfieldMarks. "With an organization like Rousso backing us, it allows us to just focus on products, sales and marketing."
Sheer has had an eventful year. Harvé Benard Ltd. acquired a majority interest in New Frontier, the women's casual better sportswear brand he founded in 1990, from the Windsong Allegiance Group LLC last January. Sheer became president of Harvé Benard, and a few months later, with five other Harvé Benard executives, bought GarfieldMarks. The companies shared a back office.