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L Catterton Acquires Majority Stake in Ganni

With new backing from the LVMH-linked private equity firm, the distinctive Danish label has its sights set on global growth.  
Ganni on the street | Source: Tommy Ton

Ganni, the Danish mid-market label beloved by influencers and editors alike, is going global with the help of a top-tier strategic partner. L Catterton, the consumer-focused private equity firm whose shareholders include LVMH and Groupe Arnault, the family holding company of LVMH chairman Bernard Arnault, has acquired a 51 percent stake in the brand. The terms of the transaction were undisclosed.

“I felt we had taken Ganni to a point where we needed to look for a partner, and that would be someone who would take what we are good at and try to leverage that on an international scale,” said Ganni chief executive Nicolaj Reffstrup. “Trying to build an international brand out of Copenhagen is pretty tough… We are at a certain size where it doesn’t make sense to look for basic capital or minority investment; we needed a partner.”

Ditte and Nicolaj Reffstrup | Source: Oscar Meyer

Ganni was founded by Frans Truelsen in 2000. Reffstrup and his wife Ditte, Ganni’s creative director, took control of the brand in 2009 when it was a mostly cashmere line turning over about 1 million euros per year and transformed it into a trendy label known for its sweet-spot pricing and playful mash-up of styles, trends and colours. The brand will generate around $45 million in sales in 2017 and expects revenues to grow by 50 percent in 2018.

Instagram has been key to Ganni’s success. While the brand has a small following by international standards — 313,000 followers — its Danish model and It-girl fan base has a wide and influential reach. “It’s a very relevant group of followers and a lot of them feel that this ‘Ganni Girl’ concept resonates well with them,” said Reffstrup, referring to the #GanniGirls hashtag coined for the label’s followers by model Helena Christensen in 2015.

In L Catterton, Ganni has found an experienced partner that will help it expand in Europe, the United States and Asia. The private equity firm has invested in Gentle Monster, Gant, SMCP (Sandro Maje Claudie Pierlot) and Giuseppe Zanotti, among other fashion brands.

“They have unique knowledge of how to build global super brand,” said Reffstrup, adding that the firm's links to the LVMH Group and Groupe Arnault will also be valuable. “Quite frankly, we left a lot of money on the table because we wanted to go with the right partner, rather than the best price point.”

Moving forward, Reffstrup said Ganni will continue to take a “multi-dimensional” approach to growth, opening stores at a “moderate pace” of 5 to 6 locations per year. The label currently has 21 of its own stores in Scandinavia, as well as a thriving e-commerce business and a wholesale network of over 400 doors. “We are still in many ways a niche brand,” he said. “The US is definitely a priority because we sense that the brand resonates extremely well with the market.”

“Ganni has already established its strong international appeal, as demonstrated by its retail presence in 20 countries today,” wrote Eduardo Velasco, partner at L Catterton, over e-mail. “But the brand’s digitally driven strategy and strong e-commerce platform makes its potential for global growth even more exciting… With local offices around the globe, we are also able to provide on-the-ground operational expertise to help support and tailor the brand’s strategies in specific local markets.”

Ganni | Source: Ana Kras

Culling its stockists is key to Ganni's strategy, too. This season, Reffstrup says Ganni will drop about 100 wholesale accounts— including one he declined to name that represented 10 percent of total sales — because it no longer provided the right brand adjacencies. With prices ranging from $50 for a t-shirt to over $2,000 for outerwear and wide-ranging collections covering dresses, knitwear shoes and lingerie, Ganni is often more accessibly-priced than other brands available at its wholesale partners. Its key partners include Net-a-Porter, Browns and Selfridges, in addition to independent boutiques such as Uzwei in Hamburg, Elise Walker in Los Angeles, Boutique 1 in Dubai and London and Theresa in Munich.

Wholesale currently accounts for two-thirds of Ganni’s sales. “The longterm plan is to balance that out,” says Reffstrup. “We do not expect to grow aggressively over the years. We are going to slow down slightly relative to our size.”

Ganni will also benefit from L Catterton’s merchandising expertise. “We are not born retailers,” explained Reffstrup. “There is a lot that they can teach us about increasing the units per transaction by putting together a better merchandise offering.”

While Ganni plans to open new offices in London and New York, the company will remain headquartered in Copenhagen, its spiritual home, known for the mix-and-match style that has been a key inspiration. Pursuing scale while retaining Ganni's unique brand DNA, therefore, is a balancing act that Reffstrup knows is a challenge: “We only have very few examples of fashion companies [here] that have grown to a certain size.”

“As with any rapidly growing global brand, the key is effectively managing that growth and preserve the brand’s strong foundation,” added Velasco via email. “As Ganni continues to successfully expand in new and existing markets, L Catterton will ensure the team has the tools to maintain the high quality, contemporary style and fantastic customer experience that Ganni’s customers have come to love.”

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