Gordon Brothers Acquires European Fashion Brand Orsay

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Gordon Brothers has acquired the women’s lifestyle Orsay brand, archives, related trademarks and other intellectual property from Orsay GmbH.

In doing so, Gordon Brothers aims to maintain Orsay’s ethos while also introducing new apparel, footwear and accessories.

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Terms of the deal were not disclosed.

During an interview Wednesday, Gordon Brothers’ president of brands Tobias Nanda, said that Orsay generated nearly 500 million euros in sales pre-COVID-19.

In a joint interview with Gordon Brothers’ managing director of brands Carolyn D’Angelo, he declined to comment about the investment in the acquisition.

In April, the Boston-based Gordon Brothers received $300 million in financing from Canada Pension Plan Investment Board, increasing the advisory, restructuring and investment firm’s capital base to more than $1 billion.

In an effort to build up the business internationally and maintain Orsay’s existing franchises, a partnership with the commerce technology firm Scayle has been formed. Scayle is providing e-commerce software to the brand so that it can continue to serve shoppers in Europe. Under the new setup, Orsay also plans to use Scayle, which is the business-to-business unit and infrastructure behind About You, with its b-to-b and distribution services.

On Instagram, Orsay trumpets its “young, fashionable and affordable outfits to express your femininity.” But the company has struggled in the past year. Contrary to reports earlier this year that the Willstatt, Germany-based fashion retailer had announced plans to terminate contracts for its 200 German stores and lay off 1,200 employees, Nanda said Orsay has more than 190 stores across Europe in franchisees and wholesale accounts. The pandemic’s severe dent on business and the impact of the war in Ukraine had reportedly further depressed German consumers’ propensity to consume, the Orsay spokesperson said at that time.

Last fall, Orsay GmbH applied for protective shield proceedings due to impending insolvency in the first quarter of 2022. That turned into insolvency proceedings by self-administration at the end of January. At that time, the holding company of the French entrepreneurial Mulliez family passed Orsay on to the restructuring specialists Gordon Brothers.

Nanda said, “We bought the brand. What I will call the old company was wound down and a number of the company-owned stores were closed, mostly in Germany. But the franchisees continued to sell Orsay, continue to operate and will continue to operate over the next few years.”

A small group of employees have since been hired with the current count less than 100 people. They are focused on sourcing, design, marketing, online and franchisees, in keeping with Gordon Brothers’ assets-light model. Most of those hires previously worked for the former company. “That core group is stipulating design working on the brand similar as it was before and servicing our partners,” Nanda said. “Our goal is not to reinvent Orsay. Our goal is to continue the brand the way it was before, in terms of aesthetics and DNA but new in a way that makes economic sense.”

Interestingly, Orsay was one of the earliest European companies to go online in Germany by launching a site in November 1998. An English version followed in the summer of 1999 and Orsay started shipping online orders to all European Union countries. In a 2000 interview with WWD, an Orsay executive said the brand’s e-commerce increased five times in 1999 and were then comparable to those of the smallest Orsay store.

Nanda noted how Orsay’s e-commerce and franchise components were very healthy, but the company-owned stores were not as healthy. “That’s why we focused on e-commerce and the franchisees in terms of our business model. But in terms of product, design and marketing, those things are done very well so we’ll continue with them,” Nanda said.

Looking to make Orsay a lifestyle brand along the lines of a Laura Ashley or a Nicole Miller, two Gordon Brothers-owned companies, D’Angelo said the plan is to dress the Orsay customer from head-to-toe and to create home lifestyle products. That could translate into home decor, more accessories, a fragrance or jewelry. With discussions underway with potential partners, the goal is to launch some new categories in the back-half of next year, D’Angelo said.

Tarek Müller, cofounder and co-chief executive officer of About You and Scayle, praised Gordon Brothers, which dates back to 1903, for “its enthusiasm for Orsay, flexibility and readiness to ensure its continued presence in the European market.”

Gordon Brothers has been investing in brands since 2003. The company has helped to reinvigorate some well-known and nostalgic labels like Laura Ashley. Gordon Brothers also owns the New York-based Nicole Miller. The firm conducts more than $100 billion worth of dispositions and appraisals annually and provides short-term and long-term capital to clients. It is known to lend against and invest in brands, real estate, inventory, equipment and other assets together and individually to give clients liquidity solutions.

Through its acquisitions, Gordon Brothers’ approach often involves expanding licensees and franchises in order to strengthen e-commerce and develop more strategic wholesale and retail ties. Referring to Orsay, Nanda said, “Our goal is to continue along the lines of the way that it’s been before. If we do our job right, the woman, who shopped Orsay last year, shouldn’t see a difference. She will continue to see the same categories, same items and the same styles when she walks through an Orsay store.”

As part of a geographical growth strategy, the brand aims to build sales in France, Spain, Italy, the U.K., Panama, Argentina and Brazil, he added.

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