Randa?Digital Labs?(RDL), the venture capital and digital marketing arm of?Randa?Accessories, is looking to invest in more early-stage, digital-first companies, said Heath Golden, president of?Randa?Digital Labs and executive vice president and chief strategy office of the parent company.
Randa?Accessories, a privately held company based in New York City, announced on 7 May that it will acquire Dallas-based?Haggar?Clothing Co., a brand known for its men’s slacks and with both brick-and -mortar and e-commerce channels. The combined company is expected to have revenues in 2019 of more than USD?1bn, according to a news release.
Though Golden, the architect of the?Haggar?deal, said there may be some small tuck-in acquisitions following the?Haggar?deal, he said there are no specific plans at the moment and another major acquisition would be several years away. Any tuck-ins would likely be on an opportunistic basis, he added.
But, the executive said,?Randa?Digital Labs is constantly looking for more investment opportunities. In any investment in an early stage company,?RDLtakes a board seat and helps the small company scale its operations by making all of the parent company’s resources available. Later on, the investments may become acquisition targets themselves. Another goal is to learn what drives the investment’s success, how its brand resonates with consumers and how it builds itself, he added.
RDL?prefers to invest in Series A or Series B rounds, he said, and in the past has invested differing amounts, including around USD?5m. Typically, it will participate in a round of between USD?8m?and USD?12m?and take a minority stake, and usually targets companies with revenue between USD?10m?and USD?20m.?RDL?currently has investments in?Stantt, a custom men’s dress shirts maker;?Baboon, a backpack and duffel bag company;?Knot Standard, a custom men’s casual and dress clothing maker; and?Greats Sneakers.
So far,?RDL’s?investments have been in apparel and accessories, but Golden said it could invest in any products a big-box retailer would sell.
“We haven’t done cosmetics yet,” he said. “That’s not to say it’s our first choice but it’s certainly an interesting category.”
Golden declined to share financials on the?Haggar?deal but called it “transformative” for?Randa.?Haggar?was attractive to?Randa?because it’s an iconic, growing brand with great distribution, he said. The deal was financed through a combination of cash on hand and financing provided by?Wells Fargo Bank,?National Association?and?JPMorgan Chase Bank, N.A..
Randa?was founded in 1910 and is still family-owned, Golden said. It makes a vast line of accessories, including belts, neckwear, jewelry, slippers and luggage.?Randa?has been acquisitive throughout its history, which includes a USD?80m?acquisition of accessory importer and distributor Swank and the 2001 purchase of Humphreys Accessories for USD?98m, according to?Mergermarketdata.
It has licenses to produce and distribute products from numerous brands, including Tommy Hilfiger, Columbia Sportswear, Dickies and Kenneth Cole.
Randa?has no plans for an exit at any point, Golden said, adding that the company is happy to remain private.
The company has more than 4,000 employees in 26 offices across 10 countries and distributes globally. In addition to digital marketing,?RDL?also tests new products and designs and works as an informal consultant with leading retail companies, Golden said. It also shares insights from its investments with its retail partners, he added, such as how early-stage companies grow quickly.
Golden said it depends on the deal as to whether?Randa?hires an investment banker. It hired?Threadstone?Advisors?in its unsuccessful bid last year to acquire?Perry Ellis International.