Fashion's New Money Matchmakers

The list of designers looking for money is long and getting longer. I've recently heard that Zac Posen and Lanvin are looking for additional financing along with start-ups like Phoebe Philo, the former designer at Chloe. But getting funding from big groups isn't easy -- particularly if a label has less than $10 million in sales. The old adage told to young designers was do a round of "friends and family" financing, which always makes me think "someone's friends and family, but not mine." But now that the list of people eager to get in on the luxury boom is growing -- witness the recent luxury investments made by entertainment moguls Harvey Weinstein and Simon Fuller -- there's a whole new way to find these friends and family investors. Seasoned executives have begun to realize that life after their last job doesn't have to be simply consulting -- it can be doing financial matchmaking too.

Marvin Traub, the former Chairman of Bloomingdale's, had been doing brand and retail consulting since he left Bloomingdale's. But increasingly he found he was helping to match companies with investment. It was Traub who put Harvey Weinstein, Halston and Hilco, the Canadian private equity company together, for instance. So last December he hired Aslaug Magnusdottir to help form a new investment arm -- TSM Capital. The S is for Mortimer Singer who has worked with Traub for the last five years. Manusdottir came from Baugur Group where she oversaw the acquisitions of Matthew Williamson, PPQ and Criminal clothing.

TSM isn't a fund. They don't have a pot of money they're looking to place. Rather they will match investors to early stage brands (those with sales between $5 million and $25 million) on a case-by-case basis. Their first deal (which I hear involves a British brand) is expected to be announced next week. But finding the funding is only part of the TSM equation. Once the deal is done, a TSM member will sit on the board of the brand and offer strategic advice and help form relationships with retailers -- the kind of work Traub has been doing for years. "You have to spot a brand and a team that want to take it to the next level. Which is not just about the quality of the designer. It's also about the designer's desire to build a business," said Magnusdottir.

Other luxury goods executives who think their previous experience gives them an advantage in making luxury acquisitions include Marty Wikstrom, former C.E.O. of Harrod's and Dawn Mello, former fashion director at Bergdorf Goodman and C.E.O. of Gucci, who are managing the Atellier Fund, a private equity fund backed by the Richemont Group. They have acquired Harrys shoes and AdamPlusEve. Jeffrey Aronsson, the former C.E.O. of Donna Karan announced his fund in January, but has yet to make an acquisition. Robert Bensoussan, the former C.E.O. of Jimmy Choo, has been raising money for a fund since he left Jimmy Choo in June.