Derek Lam‘s company announced Friday that after a little more than a year of financial independence, it has secured financing, selling a minority stake to young, retail-focused venture capital firm Sandbridge Capital.
The two-year-old firm raised a $33.4 million fund to invest in retail and consumer product companies last September, and was formed with backing from a myriad of fashion industry icons, according to a release sent out by Lam. Among Sanbridge’s senior advisors is Tom Ford’s business partner Domenico De Sole, who has been mentoring Lam since he won the CFDA/Vogue Fashion Fund in 2004. A spokesperson from the firm says it has made investments in other fashion brands that have yet to be announced.
David Fife, managing partner of Sandbridge, said in a statement that the company plans to expand the brand’s retail, wholesale and direct-to-consumer e-commerce platforms (i.e., the whole business), and that Lam is poised to become the “next premier American luxury lifestyle brand.”
In November of 2012, Derek Lam bought back his namesake company from Labelux, as part of the latter’s plan to refocus on luxury leather goods and shoes. At the time, Lam said he and Jan-Hendrik Schlottmann, CEO and co-founder of Derek Lam, were excited to assume sole leadership of the company. But Sandbridge is said to be taking a “significant minority position” in Derek Lam’s brand — that could be up as much as a 49 percent stake.
Since their separation from Labelux, Derek Lam has undergone some significant changes, likely in the interest of cutting costs, like switching PR from in-house to an agency, and moving its offices from 10 Crosby Street in SoHo to midtown. So, the company probably needed some sort of of cash injection to carry out its plans for growth. And it sounds like Sandbridge can offer them a more personal approach than, say, an LVMH, who has a huge roster of other luxury brands to focus on. At the same time, it’s a bit of risk since Sandbridge does not yet have a track record with other brands.
A 10-year-old label, Derek Lam is widely respected, and his designs are coveted by fashion insiders. But he has yet to reach the level of mainstream recognition that some of his contemporaries have gotten to. Take Alexander Wang, for example, who used to be Lam’s intern. It will be interesting and exciting to see how Lam’s profile grows under this new support system.