31/05/2019 Randa Digital Labs seeking early-stage digital-first consumer retail companies, president says 
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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, RDL takes 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 Mergermarket data.

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.

by Alan Burdziak


Source mergermarket
Value GBP 791m (Randa 2019 revenue estimate)
Stake Value between 10% and 29% inclusive
Target Haggar Clothing Co.
Bidder Randa Accessories
Debt Provider JPMorgan Chase Bank National Association
Financial advisor Threadstone LP
Debt Provider Wells Fargo Bank, National Association
 
Bidder Randa Accessories
Bidder Randa Digital Labs
 
Sectors Consumer: Retail
SubSectors Apparel
Other retailing of consumer products and services
Intel Type Bolt on/Opportunistic
Countries USA
Intel. GradeConfirmed
Intelligence ID2846602