Pepe Jeans Group, the clothing retailer which also owns British brand Hackett is exploring a sale of the business.
A sale of both Pepe Jeans and Hackett could fetch around €700m (£553.6m). Private equity firms including KKR, Permira, CVC and PAI are reportedly interested in acquiring the company.
Pepe Jeans was started by three brothers at a weekend stall on London’s Portobello Road Market in 1973 before expanding to a store in Carnaby Street and then enjoying popularity across Europe during the 1980s.
The jeans business now trades in 60 countries with 30 stores internationally with 2,000 employees.
From its first big advertising campaign, which featured supermodel Bridget Hall, the jeans brand also provided Kate Moss with her first ever advertising campaign.
The fashion company has since used American actor Ashton Kutcher, actress Sienna Miller, model Alexa Chung and footballer Cristiano Ronaldo in its campaigns. Pepe has most recently called on model of the moment, Cara Delevigne, to be the face of the brand’s skinny jeans and streetwear range.
The group’s male luxury fashion Hackett brand has a strikingly similar past, after it was also started in 1979 on the Portobello Road.
In 2005 Richemont, the world’s second largest luxury goods firm, sold Hackett to Spanish investment company Torreal. Torreal also bought a 40pc stake in Pepe Jeans from 3i in the same year.
In 2010 Torreal brought in Spanish private equity firms L Capital and Arta Capital, which is backed by one of the wealthiest dynasties in the world, the Mallorca-based March family, to take a 30pc stake in Pepe Jeans. At the time of the investment, four years ago, Pepe Jeans was valued at over €300m.
An acquisition of the business will give a buyer a strong footprint in India, where Pepe Jeans is one of the biggest denim brands.
Pepe Jeans Group is understood to have annual earnings before interest, taxes, depreciation and amortization are about €60m. Morgan Stanley is understood to be advising on the potential sale.
Dealmaking in the consumer sector has had a revival this year, particularly in cases where private equity owners have been invested since before the recession. Most recently TA Associates sold British floral brand Cath Kidston to Asian private equity firm Baring, who hopes to cash in on the group’s appeal to Chinese shoppers.
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