Global private equity firm Advent International has bought a majority stake in Sydney-founded women’s fashion label Zimmermann.
Reuters has reported sources as saying the deal values Zimmermann at more than $US1 billion.
While the financial terms were not disclosed, two people close to the matter said the transaction valued the brand at around 14 times its core profit − meaning around $US1.15 billion ($2.3 billion).
Zimmermann has revenue of around $US260 million and a more than 30% core profit margin, the people said.
The investment by Advent will enable Zimmermann to speed up international expansion including in Asia and the Middle East, and boost its distribution network, including its digital offer, Advent International, Zimmermann and Style Capital said in a joint statement.
Style Capital − an Italian private equity firm that specialises in luxury brands and has over time owned labels such as Twin-Set, Sundek and Golden Goose − and the Zimmermann family will retain a relevant minority stake, they said, adding that the company will continue to be run by its founders and current management.
Founded in Sydney in 1991 by sisters Nicky and Simone Zimmermann, the brand has gained international recognition for its luxury swimwear and sophisticated floral print dresses with patterns reminiscent of still-life painting.
In addition to selling its clothing through a range of top luxury retailers globally, Zimmermann operates a network of 58 of its own stores in Australia, the US, the UK, Europe and China. It also operates its own sales website.
Retail and consumer goods are two of the sectors targeted by Advent International. The firm’s current portfolio includes sports clothing business lululemon, perfume brands Parfums de Marly and Initio Parfums Privés, beauty retailer Douglas and make-up brands bareMinerals, BUXOM and Laura Mercier.
Mediobanca and Rothschild advised the Zimmermann family and Style Capital on the deal.
New York-based growth capital firm General Atlantic took a minority stake in Zimmermann in 2016. That stake was exited when Style Equity acquired a majority stake in the business in 2021.
The Zimmermann label began in 1991 with Nicky designing dresses and selling them at the street market in Paddington, Sydney. Nicky’s dresses were featured in Vogue Australia while she was still selling at the street market. That gained her orders from boutiques around Australia and encouraged her to open her first retail outlet in Darlinghurst, Sydney. The introduction of swimwear to the design range won Zimmerman its first overseas orders.
Image: A Zimmermann dress at Sydney Fashion Week.