Building a New Era at St. John Knits
NEW YORK — When Michelle Obama wore a chic, black St. John jumpsuit on “The Tonight Show Starring Jimmy Fallon” late last month, she garnered positive reviews for the look. To executives at the Irvine, Calif.-based firm, that moment also signaled a message loud and clear: St. John Knits’ future under new management is off to a good start.
Since Bernd Beetz invested in St. John last year, became its chairman and poached Geoffroy van Raemdonck from Louis Vuitton to be chief executive officer, the American fashion house has been going through change in order to reach its global potential, not least of which was an investment by Chinese conglomerate Fosun International. Since taking up their posts, the two executives have closely studied the house’s history and business structure to understand the foundation and develop a blueprint for its future. They have now come up with a multifaceted vision that includes the hiring of a creative director; increased innovation in knitwear, which is the brand’s core category; a larger assortment of special occasion and casual luxelifestyle clothes, and international expansion, particularly throughout Asia.
“Geoffroy and myself have a very similar philosophy on how to approach a brand, so we looked at the organization and the heritage,” said Beetz, who was one of the beauty industry’s top executives and played an instrumental role in transforming Coty Inc. during his tenure as ceo. “That has been the platform for all the things we have been doing up until now.”
The vision is strongly rooted in founder Marie Gray’s story, though that is being updated to suit more modern sensibilities. The aim — as in any brand reinvention — is to cultivate new customers without alienating the loyal existing base.
“We want to be the accomplice to accomplishment for women around the world,” van Raemdonck said during an exclusiveinterview with the duo at St. John’s showrooms on Fifth Avenue here. “This really goes back to how Marie Gray started, knitting a shift dress for herself in 1962. Her desire was to outfit women of success. She believed strongly, and we believe strongly, that living well is wearing well, and that women have a desire to wear clothes to accompany them in life.
“Our approach is one that doesn’t look at the age of the customer,” he added. “It’s an attitude and outlook on life.”
To realize this, St. John has started the search for a creative director, who is expected to oversee all design elements and work with senior vice president of design Greg Myler. The new hire will “translate our vision on every touch point, from the product to the imagery to the windows and the store concepts,” van Raemdonck said. “The notion of ‘of-the-moment’ is really important. This woman lives in this world, and in a sense, we rise above fashion. Fashion is a key element and we want to be of the right moment and speak to the trends of the moment, but most importantly, we want to deliver clothes that work for the woman.”
The modern sensibility will extend to all brand areas. “We are developing a new approach to our look book and our photo shoots that is much more inviting,” van Raemdonck said. “They will tell a story that helps the customer project themselves into our lifestyle. We are investing in windows. There are a lot of things we are doing right now to signify change, but the big change will come when we present a collection that we are responsible for. That starts a year from now as we design a year out.”
Knits will play a key role, but innovation will become an important factor. St. John has its own domestic workshops and manufacturingfacilities, which it can use to develop new knits. “That’s something that has not been reached in the past, and we want to put much more focus on it,” Beetz noted.
While the brand’s core continues to be daywear, about one-third of the business is in evening, or, as van Raemdonck noted, “going from a restaurant to a formal gala or mother-of-bride.” The company is looking to build on this category, as well as more casual work and weekend clothes.
The duo see potential both in North America and worldwide. Fosun is expected to hasten further expansion in China and beyond (in fact, Beetz’s opportunity to invest and take a leadership role in St. John came to him via Fosun and his friendship with Patrick Zhong, its senior managing director). Vestar Capital Partners continues to be the majority investor.
Beetz and van Raemdonck declined to disclose St John’s volume — estimated to be about $400 million a few years ago — but said that 80 percent of the company’s business is still in the U.S., though that ratio is likely to shift in the future.
“Greater China will be a prime focus internationally,” van Raemdonck said. “We have been there since 1992. We have 21 locations; 18 are individual boutiques, and we want to grow in that market. We are reopening a store in Hong Kong next month and are signing a couple of leases there in the most attractive malls.”
He called the region’s potential “really critical” to St. John’s future growth, with further opportunity to amplify the brand presence in Japan and Korea.
Equally key are the Middle East, where St. John already has two units in Dubai, and Europe, where it has had a strong presence and sell-throughs at Harrods since 2008, as well as KaDeWe in Berlin and Tsum in Moscow, for example.
“It’s a great U.S. brand that we can really internationalize,” Beetz said. “We have a vision and a target. We have a clear understanding of what the basis has been. I think we have the way to contemporize that, and capture the zeitgeist of where we are today.”
Van Raemdonck added, “Once you establish that, then accessories, sunglasses, handbags andfragrance become also very relevant. We want the woman to enter our lifestyle and we are there to outfit her for success, and that’s encompassing of everything.”
On the more immediate horizon is the reopening of the Vancouver boutique at the Hotel Vancouver on Wednesday, followed by another reopening at the Landmark mall in Honk Kong on March 31. In November, the company plans to unveil a new store concept in its location at the Americana Manhasset on New York’s Long Island. The look is still in development.
Since the two executives joined, Gray, who is on the company board, has been a key source of information. “She is a great inspiration,” van Raemdonck said. “She is a great voice of the spirit of the brand, and makes herself available at any time. We have both spent a lot of time with her to get the gist of what she has created, and understand the love and the passion that she has had for her customer.”
That essence won’t be changing. “The spirit is the same,” Beetz said. “She is very helpful, but also very supportive of what we’re doing. To succeed in life and to succeed in your career — that’s something she wanted to address, and that’s something we really want to reactivate.”
Canada Pension Plan Investment Board Enters Into Agreement To Acquire Vestar IV Portfolio Company Wilton Re
Toronto, ON, Canada (March 21, 2014): Canada Pension Plan Investment Board (CPPIB) announced today that a wholly-owned subsidiary of CPPIB, together with the management of Wilton Re, have entered into a definitive agreement to acquire 100% of the common stock of Wilton Re Holdings Limited for US$1.8 billion from a group of investors led by Stone Point Capital, Kelso & Company, Vestar Capital Partners and FFL. The transaction is subject to regulatory approvals and other customary closing conditions.
Wilton Re is a provider of life insurance and reinsurance solutions to the U.S. life insurance market and a leading acquirer of closed blocks of life insurance policies. Since its inception in 2005, Wilton Re has successfully invested over US$1.7 billion in a variety of strategic in force reinsurance and M&A transactions.
“In making a long-term investment in Wilton Re, CPPIB views the company as an ideal platform through which CPPIB can deploy significant follow-on capital at scale in the U.S. life insurance sector,” said André Bourbonnais, Senior Vice-President, Private Investments, CPPIB. “Closed-block life insurance is an asset class with attractive risk-adjusted returns, well-suited to our long-term horizon.”
“CPPIB ownership positions the company for growth and enhances our service offerings to clients and policyholders,” said Wilton Re Chairman and CEO, Chris Stroup. “CPPIB represents the next phase for Wilton Re – a strategic owner, committed to our business model, with a very long term investment horizon and unparalleled capital resources. Under CPPIB ownership, we anticipate the capital resources necessary to accelerate growth and expand our core In Force Solutions and middle market insurance, and enhance our competitiveness overall.”
“We are investing alongside and share a common vision with Wilton Re’s management team, led by Chris Stroup, and together we plan to invest further capital into the business to support its continued growth for many years to come. As a AAA rated long-term investor, we believe CPPIB is an ideal shareholder for Wilton Re’s employees, policyholders and client partners,” said Mr. Bourbonnais.
About Canada Pension Plan Investment Board
Canada Pension Plan Investment Board (CPPIB) is a professional investment management organization that invests the funds not needed by the Canada Pension Plan (CPP) to pay current benefits on behalf of 18 million Canadian contributors and beneficiaries. In order to build a diversified portfolio of CPP assets, CPPIB invests in public equities, private equities, real estate, infrastructure and fixed income instruments. Headquartered in Toronto, with offices in London, Hong Kong, New York City and São Paulo, CPPIB is governed and managed independently of the Canada Pension Plan and at arm's length from governments. At December 31, 2013, the CPP Fund totalled C$201.5 billion. For more information about CPPIB, please visit www.cppib.com.
Vestar Capital Partners and Goldman Sachs in Partnership to Acquire Hearthside Food Solutions
NEW YORK, NEW YORK – March 19, 2014 – Goldman Sachs and Vestar Capital Partners announced today that they have signed a definitive agreement to acquire Hearthside Food Solutions, the largest independent bakery and contract food manufacturer in North America, from Wind Point Partners. Terms were not disclosed. The transaction is expected to close in the second quarter of 2014. Goldman Sachs and Vestar will own equal stakes in the company going forward.
Hearthside Food Solutions is the nation’s largest and fastest-growing independent bakery and a full-service contract manufacturer of high quality, grain-based food and snack products for many of the world’s leading premier brands. Hearthside offers a diverse product portfolio focused on four main platform categories – bars, cookies/crackers, granola/cereals, and snacks. The company manufactures more than 150 brands and 1,400 SKUs for its top customers.
“When we launched Hearthside in 2009, we envisioned a company that could transform the contract manufacturing industry,” said Rich Scalise, chairman and chief executive officer of Hearthside. “We have achieved that goal, building an industry leader and a highly successful business in the last five years based on the principles of being fast, flexible and adding more value. Going forward, by leveraging the experience and relationships of both Goldman and Vestar, we are confident we can take the company to the next level of growth in the contract manufacturing industry. We look forward to working with our new partners.”
"Hearthside is a leader in the co-manufacturing industry and management has done an excellent job accelerating its growth trajectory,” said Nicole Agnew, a managing director in the Merchant Banking Division at Goldman Sachs. “We are extremely pleased to have the opportunity to invest in Hearthside and partner with its first class management team and employees.”
“Hearthside is not only one of the largest co-manufacturers in the food industry, but also the leader in quality, safety, and innovation. They respond rapidly to industry trends and shifting consumer preferences,” said Dan O’Connell, CEO of Vestar. “Now more than ever, food companies turn to co-manufacturers like Hearthside to help them initiate and accelerate the commercialization process and for timely response to changing consumer preferences. We are excited to work with Rich and his talented team to take advantage of these positive long-term trends and grow the business.”
Affiliates of Barclays Capital and Goldman Sachs provided commitments for the debt financing for the transaction. Davis Polk & Wardwell LLP acted as the legal advisor to Goldman Sachs and Vestar in this transaction.
About Hearthside Food Solutions
Hearthside Food Solutions, headquartered in Downers Grove, Illinois, is the nation’s largest independent bakery and a full-service contract manufacturer of high quality, grain-based food and snack products for some of the world’s leading premier brands. Hearthside operates 20 food-manufacturing facilities in eight states. For more information on Hearthside Food Solutions, visit www.hearthsidefoods.com.
Del Monte's former pet unit gets new name it loves: Big Heart Pet Brands
Del Monte's former pet unit gets new name it loves: Big Heart Pet Brands
San Francisco Business Times Online: Mark Calvey - 19 February 2014
Del Monte's former pet products division has picked up a new moniker after selling off the ubiquitous Del Monte canned food.
San Francisco-based Big Heart Pet Brands' product menu includes Meow Mix, Milk-Bone dog treats, Natural Balance, 9Lives, Pup-Peroni, Gravy Train, and Kibble 'n Bits, among others.
The new name follows the Feb. 18 sale of Del Monte's consumer products operations, including the company's use of the Del Monte name, to Del Monte Pacific Ltd.
It's the more profitable pet products, not the slim margins on canning fruits and vegetables, that likely attracted a $5.3 billion buyout agreement on Thanksgiving Day in 2010[http://www.bizjournals.com/sanfrancisco/news/2010/11/25/el-monte-agrees-to-private-equity-buyout.html?page=all]. An investor group led by KKR, Vestar Capital Partners and Centerview Partners closed on the deal the following year.
"As a standalone pet products company, Big Heart Pet Brands will be singularly focused on capturing growth opportunities in the expanding $21 billion pet products category," said Dave West, president and CEO of Big Heart Pet Brands. "We are uniquely positioned with a powerful and broad pet portfolio."
Big Heart was eager on Wednesday to tout the pedigree of the industry veterans running Big Heart. West was previously president and CEO at Hershey (NYSE: HSY) before joining Del Monte in 2011. Executives have also worked at Kraft Foods, (NASDAQ: KRFT) Campbell Soup, (NYSE: CPB) PepsiCo, (NYSE: PEP) Clorox, (NYSE: CLX) Procter & Gamble, (NYSE: PG) and Gillette, which P&G now owns. That almost covers the universe of consumer products.
I predict the next big step for Big Heart will be a warm embrace of Wall Street through an initial public offering or outright sale of the company as the investor group looks to cash in on its investment.
Vestar Capital Partners Announces Promotions
NEW YORK, NEW YORK – January 14, 2014 – Vestar Capital Partners, a leading U.S. private equity firm, announced the promotions of Michael Gross and Winston Song to vice president.
“Mike and Winston are exceptional professionals,” said Dan O’Connell, CEO of Vestar. “They have each made significant, valuable contributions not only in their investment sector specialties but also to the overall firm’s success. We congratulate them, and look forward to their future contributions for the benefit of our investment partners.”
Mr. Gross, a member of Vestar’s Financial Services and Diversified Industries groups, joined the firm in 2008. Previously, he was a member of the Financial Institutions Group at Credit Suisse Securities, where he advised a diverse set of financial institutions in the bank, insurance, asset management, and financial technology sectors.
He holds a BS degree in Business Administration, with majors in Finance and Accounting, from Indiana University. He also holds an MBA degree from Indiana University’s Kelley School of Business.
Mr. Song works in the Consumer and Healthcare groups at Vestar. He rejoined the firm in 2011 after completing graduate degree studies. He first joined the firm in 2006 from Lehman Brothers’ Global Leveraged Finance Group, where he worked on a variety of M&A and private equity-related high yield and leveraged loan financings. Mr. Song began his career with CSFB Strategic Partners, Credit Suisse’s private equity secondary fund.
He holds a BA degree in Economics-Political Science from Columbia University and an MBA from The Wharton School of the University of Pennsylvania.
Finance Monthly Interview with Vestar Managing Director Brian O’Connor
Vestar Managing Director Brian O’Connor discusses the firm’s latest Consumer acquisitions and his outlook on the Consumer space with the editors of Finance Monthly magazine.
Download a PDF of the interview here.
Vestar Portfolio Company Press Ganey Acquires Technology Firm
Press Ganey Acquires Technology Firm to Enable Real-Time, Point-of-Care Patient Feedback
January 06, 2014
Innovative Platform Broadens Press Ganey’s Suite of Patient Experience Solutions
South Bend, Indiana – Press Ganey, the leading patient experience improvement firm, announced the acquisition of On The Spot Systems®, a point-of-care survey technology firm that enables organizations to capture real-time patient feedback. The acquisition advances Press Ganey’s Patient Voice™portfolio for health care organizations by adding Point of Care to existing modes of mail, phone and eSurvey. Point of Care expands feedback via any tablet or mobile device enabling providers to improve patient engagement across the continuum of care.
“We are excited to bring this next-generation technology to our clients as they look to capture feedback across the entire care experience and achieve greater care coordination,” said Patrick T. Ryan, CEO, Press Ganey. “This solution complements our existing suite of services as it allows providers the ability to understand their patients’ experiences in real time and gives organizations the information to perform critical service reliability and recovery measures.”
The software-as-a-service (SaaS)-based solution allows provider organizations to customize surveys for targeted improvement efforts. Patient feedback is immediately emailed to a triage point for service recovery or operational improvement. Actionable data is presented through an online analytics platform featuring innovative dashboards, word clouds, scorecards and trend reports, which can be exported or scheduled for delivery by email.
“Our vision at On The Spot was to develop a solution that would provide richer data delivered through a cutting-edge system,” said Ken Kimmel, President, On The Spot Systems. “Real-time feedback contains deep insights into the patient experience, which when understood in concert with additional patient feedback sources, has the transformative ability to reshape the health care industry. There is no one better positioned to make this a reality than Press Ganey.”
Jim Wagner Named CEO of Roland Foods
NEW YORK, NEW YORK – January 3, 2014 – Roland Foods Corporation (“Roland Foods”) today announced that James Wagner, 44, has joined the company as chief executive officer, effective immediately.
Charles E. Scheidt, a member of the company’s founding family and chairman and CEO of Roland Foods, remains with the company as chairman. “Jim Wagner has a great background for Roland Foods, exactly what we had in mind when we shared our intention to appoint a new CEO this past summer,” said Mr. Scheidt. “His successful track record as a senior executive spans exceptional accomplishments in sales, marketing, purchasing, and new product development in the specialty foods industry. Jim is a talented leader who will help Roland Foods accelerate its growth and continue its excellent customer service.”
“In the specialty foods business, Roland Foods is an iconic brand, a highly successful company in a sector with a strong growth outlook,” said Mr. Wagner. “Specialty foods has a powerful upward trajectory, both near- and long-term, and I believe that Roland Foods can significantly expand its already strong leadership position. I am very familiar with Roland Foods high standards of excellence across-the-board, and it’s an honor to be working at the company. Roland Foods has a great team, and I believe that our talent and product lines form a solid foundation for growth.”
Prior to joining Roland Foods, Mr. Wagner served as chief operating officer at The Chefs’ Warehouse. Before becoming COO of The Chefs’ Warehouse, he held a number of positions within the company, including chief commercial officer, director of Business Development, and vice president of the West Coast operations. Mr. Wagner led significant business optimization projects and sales performance initiatives, resulting in substantial margin and revenue enhancement and, ultimately, a successful initial public offering on NASDAQ.
Before joining The Chefs’ Warehouse in 2005, Mr. Wagner worked as an independent consultant to a number of start-up companies, including the launch of TrueChocolate, a chocolate-processing company. He was also a principal at Jump Communications and a vice president at Clear!Blue; both companies provide business consulting services.
Mr. Wagner received a B.A. in History from the University of California, Berkeley in 1993.
Vestar Portfolio Company Del Monte to Sell Canned Food Business for $1.7 Billion
(Reuters) - Singapore-listed Del Monte Pacific Ltd (DMPL.SI) will buy the canned food business of private equity-backed Del Monte Foods Consumer Products Inc for $1.7 billion, gaining a direct presence in the key U.S. market and reuniting a substantial portion of the Del Monte brand family.
Shares in Del Monte Pacific surged 10 percent on the deal.
It said the acquisition will give it the No. 1 branded position in major canned fruit and vegetable categories in the United States as well as the opportunity to offer some of its own products to the large and fast-growing Asian and Hispanic populations there.
The deal will also allow San Francisco-based Del Monte Foods to concentrate on its pet foods unit, including the recent acquisition of Natural Balance. Del Monte Foods was acquired in 2011 by KKR & Co LP (KKR.N), Vestar Capital Partners and Centerview Capital in a deal valued at $5.3 billion.
With the sale of its canned food business, the company plans to change its name.
Del Monte Pacific, a company that is strong in canned pineapple and tomato sauce, has been enjoying strong growth with net profit nearly trebling over the past three years to $32.1 million in 2012.
The transaction will give it an additional net sales of more than $1.8 billion.
"This landmark transaction offers DMPL greater access to a well-established, attractive and profitable branded consumer food business in the world's biggest market," Del Monte Pacific's Chairman Rolando Gapud said in a statement. Del Monte Pacific, which counts the Philippines as its largest market, is 67 percent-owned by NutriAsia Pacific Ltd (NPL). NPL is owned by the NutriAsia group, which is majority-owned by the Campos family of the Philippines.
With Thursday's share surge, the company's stock is up 76 percent so far this year, valuing the firm at S$1.17 billion ($936 million).
Del Monte Pacific said the deal will be largely funded through a combination of $745 million of equity in a new subsidiary created for the acquisition, as well as long-term debt financing of about $930 million that have been committed by a syndicate of bank lenders. It also plans to issue common and preferred shares in the market.
Perella Weinberg Partners LLC is the lead financial advisor and Citibank is a financial advisor to the company on this transaction.
Pinnacle Foods Inc (PF.N) and Fresh Del Monte Produce Inc (FDP.N) were among the companies that had considered offers for Del Monte Foods' canned foods business, sources have said.
Del Monte Pacific and its subsidiaries are not affiliated with other Del Monte companies in the world, including Fresh Del Monte Produce Inc, Del Monte Canada and Del Monte Asia Pte Ltd.
Vestar Portfolio Company St. John Knits Announces New Management Team
Irvine, CA – July 18, 2013 – The Board of Directors of St John Knits announced today that Bernd Beetz has been named Chairman of the Board, effective immediately.
“Bernd is a seasoned organization builder and brings an extraordinary level of leadership to the company,” said Jim Kelley, a Founding Partner of majority shareholder Vestar Capital Partners. “With the recent investment by Fosun International and our continued interest in global expansion, we are thrilled to have Bernd both as a partner in this venture and as Chairman of our Board at this pivotal time.”
Mr. Beetz is one of the most prolific executives in the luxury goods industry with almost 40 years of experience. He most recently served as the Chief Executive Officer of Coty Inc. from 2001 to 2012. During his tenure, he developed an ailing business into an industry powerhouse by building the organization and its brands. Coty’s revenue increased from $1.4B to nearly $5B during his time at the company and recently went public with a capitalization of close to $7B.
Bernd Beetz mastered similar challenges as President and CEO of LVMH-owned Parfums Christian Dior France and held various management positions during his 20 years at The Proctor & Gamble Company.
“I’m thankful to Fosun for bringing me this investment opportunity and am thrilled to help usher in a new era at St. John, an iconic American brand with the potential of enormous global reach,” said Mr. Beetz. “I look forward to working with the members of the Board to institute a strong leadership structure that will position the company for even greater worldwide success in the future.”
"We have long admired Bernd Beetz and are happy to have him as our new Chairman of the St. John Board," said Patrick Zhong, Senior Managing Director at Fosun International. "The brand's potential is enormous and there is no one better suited to help us exploit that potential than Bernd."
Bernd Beetz Appoints Geoffroy van Raemdonck CEO of St. John Knits
Irvine, CA – July 22, 2013 – Bernd Beetz, Chairman of St. John Knits, announced today that Geoffroy van Raemdonck has been appointed Chief Executive Officer of the company. Mr. van Raemdonck succeeds Glenn McMahon, who served as CEO since 2007.
“Geoffroy has an unparalleled understanding of global wholesale and retail that will be integral as we move into the next phase of the company’s history,” said Bernd Beetz, Chairman of St. John Knits. “He is an excellent leader to drive the executive team and to continue to strengthen and grow the business worldwide.”
A seasoned executive with almost 20 years of experience in retail, Mr. van Raemdonck most recently served as President – South Europe for Louis Vuitton, where he led company operations in 22 countries which generated sales of over $1B. He held several senior level positions during his years at the company. He also previously held positions at Limited Brands and The Boston Consulting Group.
“I am honored to have the opportunity to join an industry force like Bernd Beetz and to further propel this iconic American brand into a phenomenal international business,” said Mr. van Raemdonck. “I look forward to working with the Board and executive team to build upon the strong and successful foundation that they have created.”
St. John Knits retained Herbert Mines Associates in the search for the new CEO.
About St. John Knits
St. John, one of the premier names in American fashion, was founded in 1962. St. John has evolved from a family run operation to the global luxury brand known today. The company, headquartered in Southern California, now employs over 2,500 people and is a vertical operation with offices worldwide. Its collection is sold by top specialty store retailers in 26 countries and 25 company-owned retail boutiques. For more information on St. John, visit the company’s website at www.discoverstjohn.com.