The Puig I.P.O., An Outdoor Voices Fire Sale & Jacquemus Tensions

Hi, and welcome back to Line Sheet. You know, last Thursday’s Thom Browne dinner, hosted by Browne and Saks Fashion Director Roopal Patel at Mr. Chow in Beverly Hills, was very nice. A lot of private clients were invited (hi, Mary!), of course, and celebrities, too (Diane Keaton and singer Del Water Gap, among others), but so were Browne’s friends—many of whom he met during a five-year stop off in Los Angeles when he was young(er).

During his toast, Brown noted, “Sometimes I don’t care about the business of fashion,” by which I think he meant that he is underwhelmed by the transactional nature of the industry—a posture you can take when your brand generates around $400 million a year in sales for its owner, the Ermenegildo Zegna Group. Browne may be commercial, but he never lost himself in his success. Just think, he met Patel in the late 1990s, when they were both working at Club Monaco, long before they could really do anything for each other. I hope his special space in the new Los Angeles Saks performs splendidly.

Oh, and as for the overly tan, reputationally mean stylist who saw that he wasn’t seated at the fanciest table, said he was going to the bar, and escaped: I know who you are, and I’m only refraining from naming you here to avoid embarrassing your cordial hosts. The truth will come out!

Meanwhile, today’s issue is jammed with truths, both pleasant and unpleasant: Outdoor Voices is on the market again (Ty Haney, now is your time); I conjured one meaningful line on the Puig I.P.O. plans (more to come, I’m sure); and I got some clarity on what happened at the end of last year with Simon Porte Jacquemus and executive Bastien Daguzan. Also, not to worry, there’s Phoebe intel.

Mentioned in this issue: Simon Porte Jacquemus, but also Jacquemus, Rei Kawakubo, Outdoor Voices, Tyler Haney (in a good way), Phoebe Philo, Bergdorf Goodman, Yeezy Season 6, Gustavo Martinez, the Puig I.P.O., Victoria Beckham, Ludovic de Saint Sernin, Yumi Shin, Bastien Daguzan, Uniqlo, Larry David’s theory of fashion, and much more.

• The Outdoor Voices fire sale: According to a proposal going around, Outdoor Voices’ owners (Ashley Merrill and the Texas venture capital firm Oakwell et al) are looking for bids in the vicinity of just $10 million for the once-cool, almost-dead activewear business—a price that reflects the understanding that the new owner will have to spend a ton of cash to clean up their mess. The company currently owns about $7 million worth of inventory, half of which the sell side estimates will need to be offloaded via a discount retailer or sample sale, yada yada. (Ashley, if you have any OV x A.P.C. sitting around, let me know.) The company currently has about $31 million in liabilities, but according to the financial modeling I saw, it appears that’ll be wiped away once the transaction happens. (Perhaps via a Chapter 11 filing?)

  In all, the company has raised $133 million, the document says, and has lost money every year since 2019. Last year, it lost $13 million, down from $35 million in 2022. (In pandemic-ridden 2021, O.V.’s best year, the company only lost a little more than $1 million.) Marketing costs weren’t terrible—mid-single millions—but those once-beloved, now-detested totes are now their own line item. (Last year, the company sunk more than $237,000 into totes.)

  What other fun things can I tell you? The return/exchange rate last year was about 19 percent, and it was the first year that the company didn’t need to hire an exterminator. (Or maybe they did, and they just didn’t.) From this document, it seems, the plan is to keep a skeleton crew of six modestly paid employees—C.E.O (with an annual salary of $200,000), C.F.O. ($180,000), head of brand and creative ($180,000), buyer ($150,000), marketing manager ($150,000), I.T. manager ($150,000)—in place while hiring a couple more people each year until there are 14 employees by 2028. That’s not exactly an ambitious growth plan.

  But really, the most interesting thing in the plea is the way they position OV:

  We think the brand leaned a little too far into ‘wokeness’ or however one wants to say it. Our team would like to reign in [sic] the brand and emulate what we see from Vuori. We believe Vuori does a great job of leading with high quality products [sic]. We think the Company has the market share and brand recognition in the athletic apparel market to compete directly with and beat Vuori over the long-term [sic].

  Outdoor Voices, of course, was not a woke brand. Sure, it was coastal and hired models who represented many cultures and its clothes could be elasticized into some body-positivity messaging. But the lawyers and bankers here are blaming its inability to scale on a corporate philosophy rather than terrible financial management, an absent board, and poor execution. Trying to emulate Vuori is not going to fix Outdoor Voices. Here’s what I think: Tyler Haney, get someone to back you, make sure you own more than 50 percent of the business this time, and try again. Haney, whatever her challenges, is the only reason this brand means anything to anyone. At this point, who cares if it fails spectacularly? After all, it already has… (Neither Outdoor Voices nor Oakwell responded to a request for comment.)

• The Puig I.P.O. is happening: The Spanish company is looking to raise €2.5 billion, with bankers valuing the business at between €8 billion and €10 billion, according to the Financial Times. Will it be a blockbuster float, a bomb, or neither? Well, for one thing, it’s not going to be industry-changing: As one person said to me, “That’s literally, like, Kering’s February real estate buy.”

  Over the past year, luxury-adjacent public listings have only gone okay (see: Birkenstock) with bankers propping them far too high in the weeks prior. But Puig is different: It derives the majority of its profits from sales of fragrance and makeup, not any sort of super cycle-sensitive apparel or accessories. (Although it’s building up those businesses, too, most notably with the purchase of Dries Van Noten in 2018.) Anyway, get excited.

• Some more details on the Phoebe-Bergdorf drop: How did Bergdorf Goodman land the Phoebe Philo in-store exclusive? As I reported in January, I heard that the LVMH-backed (but not owned) brand had signed deals to sell at Bergdorf in the U.S., Le Bon Marché in Paris, and Selfridges in the U.K. Who knows what’s happening with the other two, but this partnership has been at least a year in the making, and it was spearheaded by Yumi Shin, Bergdorf’s chief merchandising officer. When you think about it, there wasn’t really another choice in the U.S. for a partner. Bergdorf was a major seller of Philo’s Céline in New York, and Barneys, the other big one, is gone. Nothing else could better satisfy Bergdorf’s mix of foot traffic and private client access.

  Other additional tidbits: The product, which you’ll be able to find on the floor of BG starting April 11, is a mix of the first two “edits,” including shoes, bags, and accessories. It’s a pop-up, which means it’ll be there until the stuff sells out. If you go, let me know what you think.

  Finally, I regret to inform you that the provenance of Phoebe Philo’s oversized gray T-shirt, worn in a recent portrait, appears to be Yeezy Season 6. (Thank you to the educated Line Sheet reader for the tip.) I can’t imagine a world where this isn’t correct, although a fellow Philophile reached out to say that he had purchased a similar style from Abercrombie, and it was very good. Maybe I shouldn’t admit this, but I bought one of the Yeezy guys on eBay. We’re all freaks in our own way.

• A heartwarming note from Beverly Hills: Gustavo Martinez, the city’s resident shoe-shiner, was evicted from his apartment in the Fairfax District after 37 years last month, so he launched a GoFundMe page in the hopes of getting together 30 grand. Gustavo shines the shoes of a lot of agents—probably even more pre-pandemic, before they all transitioned to Berluti sneakers—and the donation page is filled with people you know if you work in Hollywood. Top donors include the Richard Weitz Management Group ($1,250), Richard Rosen (assuming that’s WME’s head of TV Rick Rosen; $1,250), WME Sports’ Josh Pyatt ($1,000), Ari Greenburg (also WME; $1,000), plus UTA’s Blair Kohan (I like her; $1,000), UTA’s Jay Gassner ($1,000), and many more. Visit his GoFundMe page to chip in, or just to see how much people who can afford it did.

The news, which ran in Vogue Business on December 8, was confusing to people unfamiliar with the nuances of the French system. Wasn’t Daguzan already running things? Wasn’t C.E.O. the top job? It all seemed boring until, exactly two weeks later, the company announced that Daguzan was leaving the business and that Jacquemus, himself, would once again be president.

Then I started hearing the goofiest things: that Daguzan signed the Christmas cards with the title president, angering Jacquemus; that Jacquemus didn’t like the amount of press Daguzan received around the time of the president announcement. I was also told that Daguzan failed to give anyone at the company—including Jacquemus himself—a heads-up about the coverage.

I ignored all of this, of course, because it sounded very puerile. Then I started to learn more about the state of the business. The truth of these he-said, he-said allegations may not matter, but they represent a fissure in the house of Jacquemus, the rare entrepreneurial success story in a country where, for the most part, entrepreneurship is a fool’s errand.

When Jacquemus became sexy—La Bomba was the title of the Spring/Summer 2018 show—the brand took off, and so did the tiny bags. The Le Chiquito, first introduced in 2019, is 4.7 inches wide, 3.5 inches tall, and currently costs $685. Who cares if you can’t fit a phone in it; the relative affordability and welcome novelty of the micro-bags allowed them to scale up quickly. By 2022, the company was generating something like $200 million a year in sales, according to my own reporting, and 70 percent of those sales were via e-commerce. These were, to some, hard-to-believe figures—how many Le Chiquitos could Jacquemus really be selling?—but the brand’s ubiquity outside the U.S. made them plausible.

Daguzan was an ideal match for Jacquemus, the designer and the brand, as the business scaled. He’d spent several years running Lemaire, a small, independent French brand with staying power. More recently, he was managing the Puig-owned Rabanne fashion business in the earlier days of designer Julien Dossena’s tenure.

Daguzan had big plans for Jacquemus when he joined in May 2022 that seemingly aligned with the founder’s own ambitions—and what was already in the works. Just a month after his arrival, the Nike partnership launched. Months later, in September, the company opened its first physical store on Avenue Montaigne, not far from the LVMH headquarters. It’s a venerable luxury retail row—the Rodeo Drive of Paris—home to Dior, Chanel, Louis Vuitton, Bottega Veneta, Versace, Balenciaga, Givenchy, and others. But the line out the door at Jacquemus was different: The customers were younger, and not your typical tourists. There was also talk of a beauty deal with Puig, more stores, and expectations of double-digit growth each year. It felt inevitable that the company would hit $500 million a year in sales.

But over the next year and a half, that beauty deal with Puig was scrapped, and locating retail spaces in Los Angeles and New York took longer than anticipated. According to people who would know, Daguzan was aggressive in terms of sales projections, and he set unachievable (and, some argued, brand-damaging) goals. What’s more, some felt that Daguzan’s plan minimized Jacquemus’ role in the business.

Most importantly, I’ve been told Daguzan’s growth plans likely necessitated outside capital and Jacquemus, the designer, did not want to give up a material piece of his company and bring new blood and ideas onto his cap table. (Neither party cared to comment, by the way.) While there have been rumors for years that the brand has a secret investor—how else could they afford to bus everyone to the lavender fields of Provence in 2019?—every filing I’ve read indicates that Jacquemus is indeed the sole proprietor, at least of the French company.

From what I understand, Jacquemus is less interested in the company achieving unicorn status than being able to maintain the vision. While there have been plenty of rumors over the years concerning Jacquemus’ prospects at one of the big houses, what he really wants is complete control. (My take on the lavender fields: There are ways to do those sorts of press trips on the cheap without looking cheap. And on the sole proprietorship: I assume there is an LLC somewhere in the Cayman Islands or Channel Isles or Switzerland that owns a large piece of the business.)

As for whether there is truly bad blood between Jacquemus and his former C.E.O. and president: My guess is that they will both play nice publicly once the dust settles, and that Daguzan will land softly. (There have already been rumors that he is headed to Victoria Beckham, or maybe Ludovic de Saint Sernin.) And so, in the end, this seems to be a classic tale of a founder-led business that is not yet ready to operate without its founder. And maybe never will be.

Amazing that Uniqlo nailed the U.S. market after several botched attempts. It boils down to good product that earned its reputation through word of mouth. (Definitely not the functionality of the website, which is fairly impenetrable; or the marketing, which is as strange and unfeeling as ever.) If fashion people hadn’t started wearing Heattech all those years ago, would everyone be wearing Heattech? No. If Becky Malinsky hadn’t featured the banana bag a year ago, would everyone own it? No. By the way, am I the only one still buying Uniqlo U? Maybe. What’s going on with that? Things to think about. [Wall Street Journal]

Naomi on Chateau Marmont’s return. (P.S. if you like eating dinner early—who doesn’t?—it’s pretty easy to get a dinner reservation there.) [Nylon]

Larry David’s theory of fashion: “Half is more.” I do wish he wouldn’t wear so much purple, though. [NYT]

Rishi Sunak now wears Sambas. [GQ]

I’m very into the new Pucci, have I said that before? [Vogue]

Coach sued Gap Inc. for selling “Coach” T-shirts at Old Navy. [Reuters]

A nice Q&A with one of my favorite fashion writers, José Criales-Unzueta. [Byline]

Is this allowed? [Instagram]

Until Wednesday,

Lauren