(Bloomberg) – CVC Capital Partners is targeting 50% growth in street clothing brand A Bathing Ape stores around the world, betting that the shift to more casual clothing will persist after the pandemic ends.
The London-based private equity fund completed its takeover of the Japanese streetwear brand this week and is now targeting larger overseas markets such as China, the United States and Europe. Its goal is to take the brand to 150 stores over the next five years, CVC director Yann Jiang said in an interview.
“Everyone will wear more casual and fashionable clothes even if people start returning to the workplace again,” Jiang said. “Streetwear brands will benefit from the growing demand for cool designs that combine the comfort of activewear with the exclusivity of luxury.”
CVC made BAPE a separate company as part of a privatization and restructuring of Hong Kong-based IT Ltd., betting that its cult among young consumers will continue to fuel growth. Sales of street wear brands grew, on average, by around 30% in China, 13% in Japan and low teenage rates in the United States per year between 2016 and 2019, according to consultant Oliver Wyman. All of them are key markets for the BAPE.
Even so, the expansion of physical stores comes as the apparel and retail sectors have been rocked by the pandemic. Online shopping has exploded and consumers have moved away from discretionary items in favor of groceries and other essentials. The move away from luxury clothing also coincides with streetwear’s growing emphasis on cultural significance rather than high-profile collaborations.
CVC also plans to expand its digital offering to meet increased online demand in the wake of COVID-19, Jiang said.
Jiang declined to comment on the size of CVC’s investment in BAPE.
Last year, VF Corp. bought heavyweight Supreme for $ 2.1 billion, marking its biggest acquisition since it bought Timberland in 2011 for $ 2.3 billion. The Denver-based company also owns the Vans and The North Face brands.
The acquisition of BAPE represents the continuation of CVC’s mainstream branding strategy, said Hans Wang, managing partner at CVC, who sees Supreme as the brand’s closest competitor. “Our goal is to leverage the global HVAC network to help accelerate the next phase of BAPE’s international growth and expansion.
The company previously acquired high-end Swiss watchmaker Breitling and also invested in MAP Aktif Adiperkasa, which distributes brands such as Nike, Adidas and Hasbro in Indonesia, and has a stake in Tendam, the second largest retailer of specialized clothing in Spain.
CVC has about $ 118 billion in assets under management and $ 162 billion in committed funds, according to its website. Its aim in Asia is to invest in companies primarily in the consumer and service sector, with an enterprise value of 250 million euros to 1.5 billion euros, he says.
As part of the privatization, IT founder Sham Kar Wai will separately own and operate the company’s other retail business which distributes brands such as Alexander McQueen, Off-White and Gucci. CVC is now co-owner of BAPE with Sham.
Founded by Japanese artist Nigo in 1993, BAPE has over 7 million Instagram followers, the highest number of followers among global street fashion and lifestyle brands. Its range of labels includes A Bathing Ape, AAPE, Baby Milo, BAPE Black and Mr. Bathing Ape, which are sold in stores in Asia, North America and Europe.