Private Equity and The Succession Game

Because I chose to mention Betsey Johnson's age in my post about the sale of her company, some readers have been quick to call me ageist and point out that many talented designers are even older. Well, duh. (Dan was right though -- Valentino and Karl Lagerfeld are the same age, Val is just less shy about admitting it). My point is not that Betsey cannot design nor that her company isn't successful. Thirty years in business is nothing to sneeze at. My point is that it is a curious buy for a private equity company. These companies are not buying brands to pass onto their children. They're investing in brands that they can build up fairly quickly (traditionally from three to five years) and sell at a profit. Combine this with the fact that the single biggest challenge a brand can face is the loss of its namesake designer and, well, it makes for an interesting choice. Valentino's brand was just bought by a private equity house and the fashion world is all a twitter with who will replace him. Afterall, he's in his 70s. Now Betsey has many, many good years ahead of her, but eventually her new backers will want to sell the brand and succession could be a major sticking point. Afterall, no matter how loved, her brand doesn't have the recognition of a Valentino. Castanea said they consider the brand to be at the beginning of their evolution. No one would say that about Val. So unless there's someone (like her daughter or the creative director) they are positioning to take her place before the next sale comes, I would think her age could pose a problem in a future sale of the company.