WWD has learned that Combs has signed a deal with California billionaire Ron Burkle, managing partner of The Yucaipa Cos., a private equity firm based in Los Angeles. Industry sources say Burkle has invested about $100 million in the $325 million-at-retail Sean John brand and has agreed to become a partner in the rapid growth of the label. Combs will remain at the helm of the company as chairman and chief executive officer. Further terms of the new partnership, including Burkle’s stake in Sean John, were not disclosed.partnership, including Burkle’s stake in Sean John, were not disclosed.
The deal represents a major fashion step forward for Combs, who becomes the first owner of a major hip-hop-inspired label to receive backing from a large investor. It’s aimed at turning Sean John into a global billion-dollar brand.
“This is an excellent investment opportunity, and we are proud to be aligned with Sean John,” Burkle said in a statement. “Sean’s vision and leadership are evident in the success of this extraordinary young company. The combined core competencies of Sean John and Yucaipa will allow us to rapidly capitalize on Sean John’s leadership position in the dynamic industry.”
While the Sean John brand currently includes only men’s and boys’ sportswear and accessories, Combs has promised to launch a line of limited-edition women’s wear next summer. It’s a vow he’s made in the past, especially since he featured eight looks on his runway in February.
But that’s not all he is promising. In the release, Combs said that, with Burkle’s investment, he plans to grow his five-year-old company to sales of $1 billion through an extensive retail rollout, which will start with the opening next spring of his first store at Fifth Avenue and 41st Street, the opening of international businesses and an expansion of his men’s sportswear collection. In addition, a portion of the investment will be used to open a new distribution facility in an underserved community of the New York tri-state area.
“I’m trying to figure out the right retail strategy,” Combs told WWD earlier this month. “I don’t want to just roll it out. There are some things about the women’s business I’m still trying to figure out. I have the design and the infrastructure, but I’m still compiling the exact campaigns, marketing and sales plan.”