Fashion designer Nanette Lepore has grown her company considerably over the nearly 14 years since she and her husband, the painter Robert Savage, opened a small shop wedged between a gas station and a soup kitchen in New York’s East Village. Today, her women’s apparel line which bears her name and features pretty patterns, textured fabrics and vivid colors -- is sold in department stores and eponymous boutiques in New York, Los Angeles, Bal Harbour, Fla., Chicago, Las Vegas, Boston, London and Tokyo. So far, she’s done it all without the help of outside investors unless you count a $5,000 loan from her father in 1990. Private equity firms have courted her a few times over the years, but Lepore has opted to remain independent, she explained during a fireside chat with Mergers & Acquisitions editor-in-chief Mary Kathleen Flynn at the ACG New York Women of Leadership summit, which was held at the Time & Life Building in New York on Jan. 23.
Years ago, the label was in negotiations with a prominent investment firm, but the banker advising the firm had one person in mind for the CEO job, recalled Lepore. After months of negotiations, the CEO candidate agreed to work only two days a week, and the deal fell apart.
Later, Lepore turned down an offer from a middle-market PE firm, because the firm wouldn’t give her approval over firing employees. Many of the company’s employees have been with Lepore since the early days and feel like family. Some of them actually are family members, including her husband as CEO.
The issue might have gotten resolved, but “then the recession came,” Lepore said.
The recession took a big toll on the cottage industry that makes up New York’s garment district.
Lepore and her team have been instrumental in supporting the Garment Center, a city-protected area in midtown Manhattan designed to retain apparel factories and manufacturing jobs and discourage property owners from converting the space into commercial offices. Originally the area had 7.7 million square space preserved for apparel manufacturing and housed 105,000 manufacturing jobs. Today due to new development, illegal conversions to office space, and production outsourcing pressures, the center contains 1.1 million square feet of garment manufacturing space and employs 7,100 factory workers, according to the project’s website.
Nanette Lepore weathered the recession pretty well, but not without damage. Today, the company’s revenues, which Lepore declined to quantify, are down 10 to 20 percent since they peaked before the recession.
Now that the economy is more stable, Lepore is ready to expand the business. She is “open to” the idea of an outside investor.
If an investor were to come into the company, Lepore has plenty of ideas for expansion, including : a “gorgeous” ad campaign; new product lines, including shoes, handbags and accessories lines; and expansion into other countries.
What would it take for a PE investor to win Nanette Lepore’s hand?
“I would want someone who came in and just worked with us, as we are, for six months to a year, to find out what the strengths and weaknesses are, and not just bulldoze.”
For more on the ACG NY WOL, watch “More Women Likely to Emerge as Mid-Market Leaders,” a video conversation with Accordion Partners’ Michelle Van Hellemont, who chairs the committee.