Chinese Laundry Acquired by Gordon Brothers
Footwear brand Chinese Laundry has been acquired by investment firm Gordon Brothers. Such acquisitions in the affordable fashion segment often lead to SKU rationalization and restructuring. This can result in surplus inventory entering off-price and liquidation channels as the new owners streamline the brand's product lines.
- As part of the acquisition, Gordon Brothers is tasked with winding down Chinese Laundry's physical operations and selling off approximately 1.5 million pairs of shoes through an assignment for the benefit of creditors. This large volume of inventory entering the market presents a significant opportunity for off-price retailers. - Gordon Brothers' typical strategy for acquired brands involves a shift to an "asset-light" model, which focuses on licensing and e-commerce rather than direct manufacturing and retail. This was successfully implemented with brands like Laura Ashley, which was relaunched through a partnership with UK retailer Next, and Bombay Company, which transitioned to a "license/royalty" model. - The firm's brand portfolio includes other well-known names in the fashion industry such as Nicole Miller, Rachel Zoe, and the recently acquired LK Bennett, indicating a strategic focus on this sector. - Chinese Laundry's brand portfolio is diverse, catering to a range of consumers through its four distinct labels: the flagship "Chinese Laundry" brand known for trendy and affordable styles, "CL by Laundry" for a more mature and professional customer, "Dirty Laundry" for a younger, edgier demographic, and the premium, higher-priced "42 Gold" line. - The inventory available for liquidation will likely consist of a mix of styles from all four of Chinese Laundry's brands, including a variety of sandals, heels, boots, and flats designed to appeal to their different target customers. - Gordon Brothers has a history of managing large-scale liquidations for various retailers, including Bed Bath & Beyond, CompUSA, and Borders, often through court-approved processes. They have also partnered with other firms like Hilco for liquidations of fashion retailers such as Le Château and Forever 21. - The acquisition and subsequent restructuring will likely involve new licensing agreements and an expanded distribution network to grow the Chinese Laundry brands. This could see the brands entering new markets or retail channels. - Prior to the acquisition, Chinese Laundry had a global presence, with distribution in over 30 countries and retail locations in Los Angeles and Las Vegas, in addition to a strong e-commerce platform. The company had previously collaborated with celebrities like Kristin Cavallari to enhance its brand appeal.
