Advent’s $1b-plus private equity partnership to drive Zimmermann’s global growth

Private equity group Advent International has snared a majority stake in Australian luxury fashion house Zimmermann in a shareholder reshuffle that is said to value the company at more than $1 billion.

The buyout doesn’t affect the shareholding of sisters Nicky and Simone Zimmermann, who started the global brand as a stall selling their dress designs at Sydney’s Paddy’s Markets in 1991, as Advent is acquiring the lion’s share of the existing majority shareholding held by Style Capital.

Advent says that Style Capital, together with the Zimmermann family, will retain a ‘significant minority shareholding’ in the company while the Zimmermanns and the company’s management team will ‘continue to drive the brand’s future growth’.

Style Capital, an Italian private equity firm based in the world’s fashion capital of Milan, swooped on 70 per cent of Zimmermann in 2020, paying $408 million in a deal that then valued the fashion group at more than $580 million.

Zimmermann is said to generate gross profit of about $260 million a year, and pre-tax earnings of about $125 million.

The Boston-based Advent International has US$95 billion ($145 billion) in assets under management, including an extensive retail and fashion portfolio.

Advent recently took a stake in French brands Parfums de Marly and INITIO Parfums Privés, as well as specialist beaty products retailer Douglas. Other investments include Orveon, which owns the bareMinerals, BUXOM and Laura Mercier cosmetics brands, and Lululemon Athletica which is a specialty retailer of athletic and yoga apparel.

Last month, it was rumoured that Advent was prepared to splash out up to $1.75 billion for Zimmermann. While financial details of the acquisition remain confidential, the industry is generally assessing that the deal is worth upwards of $1 billion.

Advent says its investment in Zimmermann will help the company build on its ‘strong multi-decade performance, by accelerating the brand’s international expansion in existing and new key luxury markets, such as Asia and the Middle East’.

Style Capital CEO Roberta Benaglia affirmed the company’s desire to stay on as a Zimmermann investor after being approached by Advent.

“Early in our conversations with the Advent team, it became clear that they recognised the considerable potential within the brand and shared a common vision for further expansion over the long-term,” says Benaglia.

Advent says it plans to grow Zimmermann’s product categories and accessories, and to strengthen the company’s online and omni-channel presence.

Zimmermann has 56 stores in Australia, the US and UK, while its label is also stocked in major high-end retailers such as Selfridges, Harrods and Saks 5^th Avenue.

“Zimmermann presents a rare and exciting opportunity to acquire a fast-growing iconic luxury fashion brand with significant potential for further expansion,” says Ranjan Sen, managing partner of Advent International.

“The Zimmermann team have successfully created a distinctive and desirable global luxury brand, which has built a loyal customer base around the world.

“We look forward to supporting the management team around the CEO, Chris Olliver, and Nicky and Simone Zimmermann, to help build on the company’s strong foundations and deliver superior continuous growth.”

Olliver has welcomed Advent to the company’s share register, describing the private equity group as a ‘like-minded investor’.

“They bring proven experience supporting luxury brands in taking this next step and we are thrilled by the opportunity to work together,” he says.

Nicky Zimmermann, the chief creative officer, sees benefits in having both Advent and Style Capital as partners for growth.

“There are so many exciting opportunities for Zimmermann ahead and Simone and I feel extremely fortunate to be going on this journey with our team, one that started nearly 30 years ago at Paddington Markets in Sydney.

“For us, the opportunity to work alongside so many talented and passionate people each day is a privilege and there is so much we want to achieve together.

“We look forward to working collaboratively with our new partners to achieve our shared ambitions for the brand, with our loyal clients at the centre of that vision.”