St. John Put on the Auction Block by Majority Owner
St. John could be getting a new owner.
Published reports note that the high-fashion California label is up for sale by its majority owner, Vestar Capital Partners.
Vestar bought a majority share of the designer knitwear company in July 1999 for $520 million and became very involved in the company.
Vestar President James Kelly was St. John’s chairman of the board from November 2002 to August 2011 and was always in the front row of the company’s heavily attended runway shows held twice a year near St. John’s offices in Irvine, Calif. The company employs about 2,500 people. The Rothschild investment bank is in charge of looking for buyers.
Neither St. John nor Vestar would comment about the sale rumor. Vestar public-relations representative Carol Makovich said Vestar and St. John declined to comment about a possible sale.
Ever since its founding in 1962, St. John has had a loyal following for its knit suits made at its Irvine facilities. Power women like the suits’ no-wrinkle staying power and ability to make a body look more compact.
One of the brand’s most loyal customers is Los Angeles celebrity attorney Gloria Allred, who wears St. John knit suits about 99.9 percent of the time and can be seen wearing them at her well-publicized press conferences, which are often broadcast on the evening news.
The company has had its ups and downs over the years. But recently, it has been on a steady course to grow revenues, which took a hit during the recession. Glenn McMahon took over as chief executive in 2007, after being president of Dolce & Gabbana USA.
He stepped in after the CEO position had been empty for more than one year following the departure of Richard Cohen, an East Coast executive who was brought on board to inject some energy and youth into the label.
Cohen hired actress Angelina Jolie as the face of the label’s advertising campaign and tried to update the look of the clothes. But annual revenues dropped from the company’s high of $400 million after Cohen alienated many of the brand’s tried-and-true customers.
Estimates are that McMahon has brought revenues back up to that level by expanding sales into Asia and boosting the company’s selection of accessories and shoes.
St. John, founded by Marie and Robert Gray, was originally called St. John Knits but changed its name after Cohen tried to upgrade the brand to encompass more customers.
The Gray family still maintains a minority share in the company. Robert Gray passed away last February at the age of 86. His wife, who for many years was the company’s principal designer, remains a consultant, as does the Grays’ daughter, Kelly Gray, who once was the principal model for the company’s collections. Kelly Gray now has her own label, Royal Underground, an edgy line of contemporary designs.
St. John sells its clothes to upscale stores such as Saks Fifth Avenue, Neiman Marcus and Bloomingdale’s. It also has about 27 stores and outlets across the country.—Deborah Belgum
