Ron Burkle: Likes Old Media and New Bling, But Where's Jade?

Rob Burkle's private equity company, Yucaipa Companies, closed a deal on Friday. No, it wasn't an offer for Dow Jones & Co. But it was pretty glamorous: Yucaipa bought London-based jeweler Stephen Webster on Friday. The price wasn't disclosed, but Webster told the FT that Burkle now owns "close to 50 percent" of his company.

Designs by Stephen Webster

The move has me wondering if Burkle isn't interested in having Webster design for his other jewelery brand as well. After all, it's unusual for private equity to make an investment without gaining control. Perhaps Webster has added-value for Burkle?

Last March, Yucaipa bought the British jeweler to the royal family, Garrard, for a price reported to be between $20 and $30 million. Garrard makes the Queen's crowns, but had no sales in 2001 when it was relaunched by owners Lawrence Stroll and Silas Chou. They appointed Jade Jagger as creative director and last year it did some $7.5 million in sales.

Jade's Garrard products got a mixed reception when they debuted in 2002. Things like a diamond hand-gun necklace aren't for everybody, but the man who hired her, Gianluca Brozetti (currently the C.E.O. of Asprey, which he bought from Stroll and Chou in a management buyout), says her positioning was a big hit with the "iPod generation."

Jewelery is a segment of the luxury goods business that all the players are watching closely for one simple reason -- compared to every other sector of luxury, only a tiny portion of sales are done by the brands. In a presentation this May, Richemont C.E.O. Norbert Platt estimated that the jewelery market is currently 50 billion euro (or $67 billion) and only 15 percent of that is branded products.

In investing in Webster and Garrard, Burkle seems to be betting both that jewelery will be branded and that new consumers won't want the same brands as their grandparents. Garrard and Webster have positioned themselves as jewelers for hipsters. Under Jagger, Garrard went from designing tiaras for the royal family to making diamond-studded skull bracelets and angel-wing necklaces. Webster makes chunky and easily identifiable pieces for celebrities like Christina Aguilera and Elton John. He recently designed a men's collection called Burning Rock for De Beers.

But the big question for jewelery watchers for the last year has been: Where Is Jade? Her contract expired last June and a team has been designing ever since. A Garrard spokesperson says Jade is still in negotiations with the new owners. The U.K. tabloids reported that her lavish expenses were the problem, but after a full year, it is hard to believe a resolution is near. (Though she did attend a Garrard party this May.) Webster had been rumored to be a possible replacement at Garrard and, with this current deal, that seems increasingly likely. He is a more talented designer and has many of the same rock-and-roll friends.

The influence of Burkle's bucks on the Garrard brand will be seen this July when the two-story, 3,600 sq. feet U.S. flagship store opens on the corner of Rodeo and Wilshire Drives in Beverly Hills. The ad campaign is due to be revived by year's end -- but whose designs will be featured in those ads is still a mystery.