When Falconhead Capital LLC bought denim brand NYDJ Apparel LLC, the consumer market was declining rapidly.
However, the firm still saw NYDJ as a "very valuable little business," says CEO David Moross. Falconhead purchased the Vernon, Calif., company in 2008 and quickly brought in Edwin Lewis, who had previously worked as the president of Ralph Lauren's womenswear division, and the head of Mossimo, as CEO of NYDJ.
"It wasn't a fashion brand, but we were able to convert it into a lifestyle-aspiration brand that today has massive distribution," says Moross. The jeans advertise "lift tuck technology," which NYDJ says can make women look and feel one size smaller.
During Falconhead's ownership period the company was rebranded twice - first into Not Your Daughter's Jeans, a company aimed at women over 50-years old, and then to NYDJ, which is now aimed at women over 20, says Moross.
Falconhead's success ultimately led to the recent sale of NYDJ to Crestview Partners and Maybrook Capital Partners in January. Terms were not disclosed, but the deal brought Falconhead a return of three times its invested capital on the deal, according to a source familiar with the transaction.
Falconhead focuses on consumer businesses and is also invested in Extreme Fitness Inc., Javo Beverage Co. Inc. and Rita's Water Ice Franchise Co. LLC . It has more than $500 million in capital commitments.
Morgan Stanley & Co. LLC acted as NYDJ's financial adviser, and Weil Gotshal & Manges LLP provided legal advice.
The deal comes at a busy time in the consumer goods sector, with recent deals by Bain Capital, which bought a majority stake in outerwear company Canada Goose in December, and Leonard Green & Partners LP's agreement to buy Lucky Brand Jeans for $225 million, also in December.