Private equity firm Brand Velocity Group (BVG) launched an industry-focused vertical called BVG Fashion & Apparel in partnership with longtime fashion financier Gary Wassner.
BVG Fashion & Apparel will leverage the firm’s core competencies of operational expertise, marketing execution and brand building, alongside its approach toward investing heavily in its own workforce, by providing investment and support to accelerate the growth of top fashion labels.
The new vertical plans to acquire fashion and accessories brands with $10 million or more in earnings before interest, taxes, depreciation and amortization (EBITDA), and more than $100 million in annual revenues.
“We recognize that we have reached a critical moment in time where our core offering has evolved,” said Steve Lebowitz, founding and managing partner of BVG. “Our positioning reflects our continued growth into new and exciting avenues, the first of which is today’s launch of BVG Fashion & Apparel.”
Wassner, who is the CEO of Hilldun Corporation, has been providing factoring, financing, purchase order funding, back-office support and business guidance to the fashion industry for more than 35 years. He has helped to launch marquee brands such as Marc Jacobs, Alexander Wang, Jason Wu, Thom Browne and Betsey Johnson. Factoring gained an increasingly important role during the Covid-19 pandemic when retailers were forced to shutter stores and, in kind, cancelled supplier orders en masse.
Although Wassner is backing the BVG Fashion & Apparel launch, he will not be named as an official partner in BVG due to his other business obligations.
“Many traditional private equity firms fail to realize that the value in fashion and apparel brands derives not just from financial metrics, but also the creativity and passion of their teams,” Wassner said in a statement. “BVG’s unique focus on human capital in addition to brand development is what will set us apart from other industry players and I’m looking forward to the work we will do together.”
The launch is the latest sprouting up in recent years to build a modern take on the brand house concept. Authentic Brands Group, a rising force in the sector, made a splash when it bought Reebok from Adidas for $2.46 billion after scooping up nameplates such as Brooks Brothers, Lucky Brand, Forever 21 and Barneys New York. Luxury-focused Lanvin Group, the Chinese holding company which owns the namesake Lanvin fashion group, as well as Italian footwear brand Sergio Rossi and Austrian lingerie label Wolford, is planning to go public in a SPAC deal on the New York Stock Exchange. And smaller firms like Digital Brands Group (DBG) and American Exchange Group recently made acquisitions of their own, with the former bringing in lifestyle apparel seller Sundry and the latter taking Aerosoles under its wing.
Prior to the fashion branch debut, BVG had been known as Brand Velocity Partners, which focused on acquiring niche, lower-middle market consumer businesses and helping them grow through its own marketing agency partnerships and business development resources.
The company has largely flown under the radar since it launched in 2019, with perhaps its biggest news to date being a January announcement that two-time Super Bowl MVP Eli Manning joined as a partner. The businesses that Brand Velocity has acquired thus far include barbecue equipment and outdoor accessories sellers BBQGuys, Blaze Outdoor Products and Magma Products; as well as Original Footwear, a designer and manufacturer of footwear for the military, first responder and consumer markets.
But now with a longtime powerhouse like Wassner in the fold, the firm has legitimate cachet in expanding deeper into fashion. The former “Project Runway: Fashion Startup” judge also operates another investment firm, Interluxe Holdings, which is the majority owner of designer outerwear brand Mackage and luxury women’s wear label A.L.C.
“What makes BVG great is the power of our network and our deep connectivity across all areas of popular culture,” said Drew Sheinman, founding partner of BVG. “Gary brings unrivaled access to the fashion industry’s established and emerging players, which fits perfectly into our model and will be invaluable as we look to pursue opportunities at the intersection of entertainment and fashion.”
BVG says it differentiates itself in its approach to drive profitability first through strategic partnerships with five specialty brand marketing agencies that develop and execute marketing and content plans across its investments. Agency partners include Source, Aisle Rocket, Tandem Thinking, WCPG and ICR.
The firm also says that its portfolio companies also leverage BVG’s sports and entertainment networks to create partnerships with athletes, celebrities and other businesses. Partners include Amazon, Reebok, Qurate Retail, Disney and New York Fashion Week alongside various professional sports leagues and major consumer goods brands.
In recognition of the company’s emphasis on human capital, general partners at the firm dedicate 10 percent of their total carried interest pool—which is their primary means of compensation—to non-management employees in every investment. This program, called Share the Gains, is designed to ensure that all employees of portfolio companies share in the success of the firm’s united efforts.