Castanea buys upscale designer(2)

Castanea Parters has made the first investment from its latest fund with the acquisition of clothing designer Betsey Johnson.

Boston-based middle market firm Castanea Partners has acquired a majority stake in Betsey Johnson, a funky fashion label associated with bold cocktail dresses and New York designer Betsey Johnson.

Betsey Johnson: ready to expand

The 65-year-old Johnson founded the eponymous fashion label in 1978; today, there are more than 45 Betsey Johnson boutiques, primarily in North America.

Castanea’s investment will help the fashion designer to expand by 10 to 12 stores per year and grow its wholesale distribution, licensing divisions and international presence, Betsey Johnson chief executive Chantal Bacon told the Associated Press.

This is Castanea’s first known investment from its latest fund, which closed on $575 million (€421 million) at the beginning of August. The fund targets investments of between $10 million and $75 million. At the time of the fund’s close, Castanea said it would have enough capital to “write the whole check” for investments, rather than doing club deals or leveraged buyouts.

Castanea was founded in 2001 by Brian Knez and former Neiman Marcus chief executive Robert Smith. Specialty retail is one of the sectors on which the firm focusses; the firm previously invested in Hanna Andersson, a designer of children’s apparel and accessories. 

The firm sold Hanna Andersson this March to Kellwood Company.

Several private equity firms have bought iconic fashion brands in recent months. European buyout firm Permira upped its stake in Italian couture house Valentino to 60.2 percent this July, after buying an additional 18.95 stake for €491.4 million, and in February, Towerbrook Capital Partners bought luxury shoemaker Jimmy Choo from Lion Capital for £185 million ($372 million, €273 million).