MILAN, Aug 28 (Reuters) - Italian luxury group Ermenegildo Zegna said on Tuesday it had bought an 85 percent stake in Thom Browne, favoured by former First Lady Michelle Obama and celebrities, in a deal valuing the U.S. fashion house at about $500 million.
The Italian company said the deal, reached with Sandbridge Capital and Thom Browne, would expand its business in the United States and widen its customer base.
The New York company will continue to be managed independently after the deal, with founder and designer Thom Brown holding the remaining 15 percent stake and with Rodrigo Bazan staying on as CEO.
“This transaction ensures the continued long-term growth of Thom Browne,” Ken Suslow, founding managing partner of Sanbridge Capital said.
Michelle Obama wore a Thom Browne coat and dress for the inauguration of President Barack Obama in 2013 and the company, founded in 2001, now counts nearly 200 employees and 31 flagship stores around the world.
“Since we started looking at partnerships, I always knew that Thom Browne would be the perfect fit,” Chief Executive Ermenegildo Zegna said in a statement announcing the deal.
Zegna recently moved away from three distinct brands - Z sportswear, classic Ermenegildo Zegna, and couture - opting for a single brand aimed at attracting customers from different ages as new generations move away from formal suit-and-tie looks in favour of more comfortable clothes.
“On this strong footing, and thanks to a thriving women’s business and strong appeal with millennials, we believe that we can build long-term value for all of our stakeholders,” Zegna, a member of the third generation of the founding family, said of Thom Browne.
The Italian group, founded in 1910 in a small town at the foot of the Alps and still family owned, has been heavily investing in recent years to introduce new, versatile fabrics for formal and more sports-oriented clothing. It has also introduced environmentally friendly dying techniques.
Private equity firm Sandbridge Capital also owns stakes in French snowsports equipment maker Rossignol, luxury online retailers Farfetch and the RealReal. Its senior advisers include U.S. designer Tommy Hilfiger, former Gucci CEO Domenico De Sole and former French Prime Minister Dominique de Villepin. (Reporting by Giulia Segreti; Editing by Susan Fenton)