Jil Sander, is an iconic and globally renowned luxury fashion brand. The company was founded in Germany in 1985 by Ms Jil Sander and is now headquartered in Milan. The company is appreciated for its differentiated design often referred to as ‘timeless simplicity’.
CCP, together with the incumbent management team, acquired Jil Sander from Prada in 2006. At the time of acquisition, Jil Sander was heavily loss making and in need of a turnaround.
WHY WE LIKED JIL SANDER
- Timeless and iconic brand with loyal following and significant intrinsic value not reflected in performance
- Highly regarded and proven lead designer, Raf Simons, had the potential to give the brand significant momentum
- Opportunity to successfully complete ongoing cost-based turnaround and hence quickly return the business to profitability
- Opportunity to optimise distribution in the existing large luxury markets and expand into higher growth new markets
WHAT WE SAW DIFFERENTLY
We believed that the underlying value of the Jil Sander brand was not reflected in the bottom line performance of the company at the time of the acquisition. Based on our experience in retail and fashion we saw a clear route back to profitability based on cost-based measures and implementation of best in class retail practices. We also believed in the existing management team that had started the turnaround and the ability of new designer Raf Simons to bring the brand back to its past successes and beyond.
HOW WE HELPED
We supported the management team to complete the turnaround plan with a rigorous and disciplined approach to costs and processes while ensuring we created a platform for future growth. Specific areas we worked on with management included:
- Significant losses were reduced or eliminated through the re-location of unprofitable stores and streamlining of overhead structures that were duplicated in Germany and Italy
- Realised efficiency gains from de-merger with Prada, e.g. de-listing from German stock exchange and brought accessories design in-house to achieve higher margins
- Improved merchandise allocation between wholesale and retail resulting In a considerably lower mark-down share and higher achieved margins in the retail channel
- Opened selected new stores in important luxury locations in new markets
In the two and a half years we were investors, Jil Sander was transformed from heavily loss-making back to profitability. Raf Simons successfully infused new life into the brand and returned Jil Sander to the forefront of fashion. Jil Sander was subsequently sold on to Onward Holdings, a Japanese listed conglomerate in 2008.