Exclusive: French label Sézane mooted as acquisition target
In the world's fashion capitals, investors are spoilt for choice when it comes to companies ripe for being bought. In recent months, the names of Isabel Marant, whose acquisition price reportedly exceeds €1 billion, and Furla, whose owner the Furlanetto family is said to be ready to cede a minority stake at the very least, have been making the rounds in the offices of investment fund specialists and major fashion and luxury groups. But the name of a red-hot French DNVB is also being mentioned with increasing frequency in the corporate divestitures and acquisitions world.
According to FashionNetwork.com sources, JP Morgan Chase & Co. has been commissioned to offer Sézane to potential investors. Various sources consulted by FashionNetwork.com indicated that the dossier is being considered by different investor profiles.
“At the start of the year, there was an extremely high amount of capital generally available. This heralded a great deal of activity on the divestment/acquisitions front, and a number of names are now being mentioned. Sézane is one of them, and so is Isabel Marant. Besides, the company is also extremely profitable,” said a fashion industry expert.
“The dossier is indeed circulating,” confirmed a source from the private equity sector. “There is talk of an attractive valuation, one that will attract players with significant resources,” they added.
Sézane was founded in 2013 by Morgane Sézalory and Thibault Lougnon, and is a French success story among DNVBs, digital native brands adept at growing their business by tapping their online communities. A model that Sézane’s founders managed to introduce on the French market, rapidly attracting investors. The first, in 2015, was US investment fund Summit Partners, which acquired a minority stake estimated at about 20%. In 2018, private equity giant General Atlantic bought Summit Partner’s share and, according to some sources, now owns a 45% stake in the Parisian label. Two London-based representatives of General Atlantic, Gabriel Caillaux and Melis Kahya, have since been appointed to Sézane’s board of directors.
Born online, Sézane, and its menswear counterpart Octobre, introduced in 2016, are now active via their e-shops but also their physical stores.
Sézane’s womenswear line, thanks to its atypical price positioning and design style, has notably snatched up a sizeable market share in the ready-to-wear segment. Some surveys have even ranked the label as one of the most appreciated in France.
Sézane currently operates 12 physical stores, with its ‘apartments’ in Paris, Aix-en-Provence, Lille, Bordeaux, New York, London and Madrid, but also uses a ‘tour’ model, opening pop-up stores in various cities in France, Europe and the USA, a way to test the label’s potential in cities where its online results are satisfactory. Octobre instead has a store and a concession at Le Bon Marché department store, both in Paris, and is available at the Sézane shops in the French capital’s 7th and 17th arrondissements.
The company’s recent growth rates suggest that a revenue of €130 million was generated in 2021, but its management has not disclosed Sézane’s financial results for some years. However, most observers noted that, with a model chiefly driven by online sales (which still account for some 90% of revenue), the company must be generating attractive margins, sure to be coveted by many industry players. Sézane’s profitability and commitment to sustainability - the company is B-Corp certified - make it an opportunity with a potentially very attractive valuation, within a ready-to-wear sector that, even though it may seem less dynamic now, still continues to appeal to investors.
According to a number of sources, the average valuation in acquisition deals for fashion companies is in the order of 10 to 12 times EBITDA. Sézane’s profile, even though its EBITDA is not known, could ensure that the multiplier will be higher. FashionNetwork.com has contacted General Atlantic and Sézane's management, but for the time being neither has replied.
The terms of the prospective deal, whether a complete acquisition or simply one of a partial stake with a New roundtable, as well as the company’s valuation, remain unclear. Now that the mergers and acquisitions market is again under pressure after the invasion of Ukraine, it remains to be seen who the prospective buyers are. Among the possibilities, L Catterton, linked to French luxury mogul Bernard Arnault and very active in recent months, is of course one. L Catterton notably bought a majority stake in Danish label Ganni and a minority one in US label Everlane, one of Sézane’s models.
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