European investment firm HLD Group has bought a 70 percent stake in the French contemporary label in a deal that closes Thursday.
The deal involves the 50 percent stake in the label that had been owned by L Catterton since 2015, as well as a further 20 percent that had remained in the hands of the brand’s founders, friends Barbara Boccara and Sharon Krief and entrepreneur Dan Arrouas.
The brand plans to continue to bolster its international footprint, enhancing omnichannel and embracing new business models, including resale.
“It’s the right time. We’ve demonstrated our growth potential and shown our resilience during the crisis,” Ba&sh chief executive officer Pierre-Arnaud Grenade told WWD.
“The business model we’ve created, the brand, the products, the elements are in place,” he said. “We’ve resisted the crash test and demonstrated the brand’s solid foundation. It’s time to enter a new phase, for which we need new investment, to take new risks.”
He continued: “We want to double our size over the next three years. We think the basis we have laid will allow this.”
Grenade is convinced that HLD is the right partner for the job. “They have the same philosophy as us when it comes to investment.…We’re very aligned in terms of objectives.”
HLD, founded in 2010 by a group of entrepreneurs, is new to the apparel space.
In the consumer segment, its past investments include Laboratoires Filorga, which grew from 10 million euros in revenues to more than 200 million euros in its eight years under the private equity firm, before being sold to Colgate-Palmolive for 1.5 billion euros in 2019.
“This deal is highly important for HLD as we have been screening the affordable luxury retail apparel space for years in Europe and believe that Ba&sh is one of the most promising companies in the space,” commented HLD Europe partner Cédric Chateau.
“We intend to keep investing in this industry by focusing on brands with strong sustainable values and business models at the forefront of new consumer trends and by leveraging our long-term approach that enables us to support them in their global development,” Chateau said.
HLD has 2 billion euros in capital and 18 portfolio companies, with average annual growth of 10 percent.
It maintains stakes in dermo-cosmetics brand SVR and cosmetic fillers specialist Fillmed Laboratories, previously sister brands of Filorga, and bought into eyewear firm Jimmy Fairly last year, its first investment in fashion and accessories.
Since L Catterton bought into Ba&sh the brand’s revenues have multiplied sevenfold. Grenade is confident they will reach more than 320 million euros this year, an increase of roughly 35 percent on 2021, when the company’s sales were up 20 percent compared with 2019, he said.
From a largely domestic business seven years ago, Ba&sh now does 55 percent of its sales outside of France. It has also tripled its store footprint to reach 300, largely through expansion in the U.S. and China. Online sales account for around 30 percent of revenues, up from 2 percent in 2015.
“Our role was to transform this great French brand into an international, digital brand,” Grenade explained.
Ba&sh has also diversified its product offering beyond the dresses and tops it was best known for, adding new apparel categories and entering accessories, which now account for 15 percent of the business. Bags, footwear and eyewear will be a continued area of focus, with a target of between 20 and 25 percent of revenues in the short term, Grenade said.
Sustainability has been another area of focus, and the brand is targeting 95 percent “eco-responsible” products — defined as being made from at least 70 percent recycled or certified materials — by the end of next year.
In its spring 2022 collection, that ratio is 65 percent, and Grenade admitted that there is still a way to go. “The global situation is quite challenging [in regard to] sourcing certain materials, but we are maintaining that ambitious objective,” he said.
The CSR strategy is part of what the brand terms “DISCO” – for Domestic (all around the world), Inclusive, Sustainable, Cartesian, Online, explained Grenade.
“Brands need to have real meaning for consumers, we need to be inspirational,” he said.
Philanthropy, notably for issues affecting women like breast cancer and domestic violence, have always been part of the label’s ethos, he said, and it continues to amplify these.
“The founders intuitively created their own universe that was almost an extension of themselves,” said Grenade. “Our role was to better conceptualize that and communicate it to consumers and to accelerate the brand’s commitments.”
Among recent initiatives is the “Blazers for Trailblazers” project, a form of incubator whereby the brand creates a series of jackets named after a selection of women entrepreneurs, with profits going to their enterprises.
“We started from the sad insight that only 3 percent of investment globally goes into companies started by women,” Grenade explained.
Initiated last year, Ba&sh will launch its second call for applications for the program in early June.
It has also been testing a resale model with third-party sites — an initiative that has reportedly resonated with consumers — and will ramp this up starting in September in partnership with French start-up Faume. “Consumers will be able to buy and sell products in exchange for a voucher” directly via the company’s e-commerce, initially in France but with plans to scale globally, Grenade said.
The investment will help the brand scale such initiatives, further accelerate growth in the U.S. and China and increase investments in digital, he explained.
Further retail expansion will focus mainly on China, where the label has around 40 stores.
Major investments in technology are already set for this year, with a new warehouse management system for Ba&sh’s facility near Paris Charles de Gaulle airport and a contract with data firm Snowflake.
Beyond doubling sales over the next three years, Grenade believes Ba&sh has the potential to become a global lifestyle brand.
“When you look at affordable luxury, the leading brands do between 500 [million euros] and 600 million [euros] in sales,” he said. “When we’ve reached that level, we will be one of the majors in the segment, but our ambition is to go even further.…There are brands with the same price positioning that are a lot bigger today.
“Lacoste and Polo Ralph Lauren, for example, are brands that have broken out of their original segment to become global brands. That’s our long-term ambition and doubling our size is a pitstop on that ambitious journey.”
