Two women, two fashion businesses, one £450m British success story
One is famed for nostalgia, the other for bringing high fashion to the web. Now Cath Kidston and Natalie Massenet have both sold their firms for huge sums
Friday 02 April 2010
One began by selling a few posh frocks in cyberspace. The other flogged retro crocks from a second-floor shop in west London. But whatever their differing retail origins, Natalie Massenet and Cath Kidston were yesterday united by cashing in – just a little – on their status as the originators of two of Britain's most successful recession-busting brands.
Net-a-Porter, the web-based designer fashion retailer set up a decade ago by Ms Massenet, and Cath Kidston, the eponymous purveyor of floral rain coats and polka-dotted cereal bowls, were yesterday captured by big business in the shape of a Swiss-based luxury goods conglomerate and an American private equity firm for a combined total of up to £450m.
The separate deals were hailed by both retailers as allowing them to expand abroad, in particular into Asia, as well as consolidating their core markets in Britain. They also had the side effect of making Ms Massenet, 44, and Ms Kidston, 50, into rather wealthy women.
Ms Massenet, an Anglo-American former journalist with Vanity Fair magazine who had initially considered setting up a chain of coffee shops before plumping for the world of designer womenswear, was estimated to have made £50m from the sale of her stake in Net-a-Porter to Richemont, the owner of blue-chip brands from Cartier to Montblanc. She will reinvest a reported £15m back into the online venture, which last year dispatched £120m of designer garments wrapped in tissue paper and large black boxes with silk bows to its three million readers, as well as staying on as chief executive.
Ms Kidston, the dyslexic boarding school girl who went for broke in 1993 by opening a shop in Holland Park selling vintage fabrics, gaily painted junk furniture and retro homewares, only to see it mushroom into a global vendor of nostalgia, sold an undisclosed part of her stake of just under 30 per cent in the company, worth an estimated £25m. The deal with Boston-based TA Associates, which is thought to have paid £100m for the chain, will see the designer retain her role as creator director and a "substantial" share holding.
Both women declined to comment on their share of the proceeds from their respective deals, focusing on what Ms Kidston said was the "next stage" of expanding her business. Ms Massenet said: "We are going to continue to build the 21st-century model for luxury fashion retailing."
By retaining roles – and stakes – in their creations, Ms Kidston and Ms Massenet will collect plaudits for creating companies which were pioneers in their respective markets to such extent that they were considered to be doomed to failure by early critics.
Ms Massenet, a mother-of-two, recalls how in 2000 she struggled to secure seed funding from private equity investors who declared that "women would never shop online". For her part, Ms Kidston, an interior designer, recognised the value of "vintage" products at a time when most dismissed them as tat. While Ikea launched its "Chuck Out Your Chintz" adverts in 1996, Ms Kidston was quietly developing a cult following among yummy mummies in Notting Hill for her rose oilcloth accessories and cherry biscuit tins.
Indeed, despite the naysayers, the two companies prospered in their chosen markets, with Net-a-Porter avoiding the pitfalls which doomed other dot.com rivals, and Ms Kidston carefully expanding her small outpost to an empire of 28 British shops, seven outlets in Japan and one in Kuwait.
Thierry Bayle, of retail consultancy Global Fashion Management, said: "Both these companies succeeded when others might have expected them to fail and they have done so by doing what they do extremely well. It should not be surprising that they have attracted interest from larger partners."
Were there any doubt about the upward curve of the two retailers, it has been proven in the recession. Between 2008 and 2010, Net-a-Porter, which employs 600 staff in London and New York, grew its sales from £55m to £120m while Cath Kidston saw its profits increase by more than 60 per cent from £2.9m to £4.6m between 2008 and 2009.
In the case of Net-a-Porter, the success can be largely attributed to Ms Massenet's strategy of combining magazine-style editorial content with an online store offering more than 200 labels, from Alexander McQueen's last collection to a new line of cashmere "lounge wear" at £250 for a robe and tracksuit-style trouser.
The website also bucked previous retail practices by negotiating cash-intensive deals with designers to put their latest collections online almost immediately rather than wait the traditional six months between the runway shows and garments reaching the shops. As a result, Ms Massenet has been rapidly installed into fashion's power list with a front row seat on the London, Paris, Milan and New York fashion merry-go-round.
The daughter of a British former Chanel model and an American journalist turned Hollywood publicist (as well as being married to a French hedge fund manager), Ms Massenet has not reached the heights from humble origins and is not shy about expressing her belief in her creation. In a recent interview she said: "I was completely confident. I never thought it wouldn't work. I never once thought it wouldn't be huge."
By contrast, Ms Kidston, who is no less ambitious than her high-fashion retail counterpart, projects a slightly more happy-go-lucky image as her chain of stores (which she hopes to expand to more than 50 shops in Japan with further outlets in China, Hong Kong and South Korea) pumps out an ever-expanding range of products, including iPhone cases and a reassuringly floral Roberts DAB radio.
Speaking before yesterday's announcement, Ms Kidston, who survived breast cancer at the age of 37, said: "I was raised in such a typically English background in the country – going to pony club and wearing a Shetland jersey and a kilt until I was 15. That's my experience of life so it makes sense that I would put it into my design."
Both women underline that success has not come without cost. Ms Massenet said: "I don't make home-made cupcakes for cupcake day. I pick them up at the store, and it's heartbreaking when I hear that some mom stayed up all night baking. But I get amazing feedback from my kids. They love the business, they are very proud, and they will grow up thinking that if mom can do this, then they can do it too."
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