What is InterLuxe? This has proven a common question on the heels of some relatively recent acquisition announcements, including the one involving buzzy young brand, Cushnie et Ochs. Founded just last year by New York-based private equity firm Lee Equity Partners, together with fashion industry veterans Allen Questrom (former CEO of Neiman Marcus and Barneys New York), Gary Wassner (one of the most noteworthy financial advisors and investors in the fashion industry), and Melissa Beste (former CEO of Akris North America and the UK and president of Americas for Alexander McQueen), InterLuxe invests in emerging fashion brands.
Maybe something of an American LVMH Moët Hennessy Louis Vuitton in the making, in its first year of business alone, InterLuxe has brokered three major deals: Andrea Lieberman sold a majority stake of her contemporary label A.L.C. to the company in August; Jason Wu sold a controlling stake in his business to InterLuxe in September; and now InterLuxe's Wassner, among others, have taken a minority stake in Cushnie et Ochs. Not surprisingly, all three brands have been clients of Wassner’s at his company, Hilldun Corporation, a factoring and finance firm that has served the likes of an array of Council of Fashion Designers of America (“CFDA”) designers, in particular, including Alexander Wang, Sophie Theallet, Wes Gordon, and Derek Lam, among many others.
Not up on factoring? Wassner (pictured above, second from left) explains, “Basically, how it works is: a retailer will place an order with one of our clients. They [that client] don’t know if the store is going to be able to pay the bill once they ship the order, so they submit the order to us, and we tell them if we approve it. If the store does not pay, and we have approved it, we pay for that order. Once a client ships the order, we then do the collection work. We also finance production -- so we advance funds on orders to help designers purchase fabric, pay factories. We lend against invoices, and then pay ourselves back. With less and less credit being offered, we help with cash flow.”
According to its website, “InterLuxe invests in emerging fashion and luxury brands with leading design talent, exceptional product, and a strong customer following. Our goal is to accelerate growth across distribution channels by solving internal resource and capital constraints and allowing talented design and management teams to focus on their core competencies.”
The only question that is left: What brand will InterLuxe set its sights on next?