WHP Scores $375M Investment From Ares for Big Valuation
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WHP Global is taking a big step up with a $375 million investment from private equity giant Ares Management, which gave the brand management firm a $1.6 billion valuation and a new, higher profile in the world of fashion dealmaking.
Yehuda Shmidman cofounded WHP in 2019 with funds from Oaktree Capital Management and has steadily built a portfolio of brands, which includes Anne Klein, Joseph Abboud, Joe’s Jeans, Isaac Mizrahi, William Rast, Lotto and Toys ‘R’ Us. The firm also owns a 60 percent stake in the Express brand and has been helping the retailer scale internationally and become a platform itself to acquire additional brands.
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Now, the cash from Ares will help the WHP keep going.
In an interview with WWD, Shmidman described the investment as “a major milestone” and “fuel for us to achieve the next phase of growth.”
The first phase — which wasn’t quite four years long — saw the company buy five brands when it expected to buy two, with the associated retail sales ballooning from zero to more than $6.5 billion, Shmidman said.
“We’re really just getting started, as crazy as that sounds,” he said. “When we look ahead, we’re thinking about what’s really a land of opportunity.”
With the economy still in such flux after the stop and start of COVID-19, investors looking to cash out of a company or brand need to be more creative.
“In today’s environment if you are a brand owner the traditional exit ramps are closed — or you might say those ramps are under construction,” Shmidman said, pointing to IPOs, dividend recaps and private sales.
“The bankers are very busy,” he said. “We’re getting lots of calls and it’s very real. It’s very palpable. It’s not a distress call…it’s a lot of calls of, ‘Hey, we’ve run our course. The next phase of growth is going to require capital. Do you want to get involved?’”
The brand manager is looking for consumer brands with scale — think sales of at least $500 million — that have what Shmidman characterized as “legacy power.”
“We’re not looking for a trendy brand that was invented last night,” he said. “We’re looking for brands that have time behind them, that have been around, that have awareness.”
WHP has over 130 licensees in 30 countries that can tap into to give a brand global scope and new revenue streams.
Jordan Smith, partner in the Ares Private Equity Group, said: “Our investment in WHP Global serves as a testament to the strength of its platform and the go-forward growth opportunity. We look forward to partnering with Yehuda and the WHP team on its mission to acquire and grow global consumer brands.”
Ares partners Jordan Smith and Aaron Rosen will join the company’s board. In addition to Ares and Oaktree, WHP’s backers include Solus, Platform Founder Group and its own employees.
The investment gives WHP some more dry powder as it squares off with Jamie Salter’s Authentic Brands Group, which has been on a tear, raising money from the likes of BlackRock, General Atlantic and Leonard Green and putting it to work buying brands as diverse as Reebok, Barneys New York, Brooks Brothers, Ted Baker and Forever 21, creating an empire with $24.5 billion in retail sales.
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