CVC Plans 50% Global Expansion of Street Wear Brand BAPE

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CVC Capital Partners is targeting a 50% growth in stores globally of street wear brand A Bathing Ape, betting that the transition to more casual wear will persist after the pandemic subsides.

The London-based private equity fund this week completed its takeover of the Japanese street wear label and now has its sights on the biggest overseas markets such as China, the U.S. and Europe. It targets growing the brand to 150 stores over the next five years, Yann Jiang, a director at CVC, said in an interview.

“Everyone will be wearing more casual, fashionable clothes even as people start going back to the workplace again,” Jiang said. “Street wear brands will benefit from growing demand for cool designs that combine the comfort of sportswear and the exclusivity of luxury.”

CVC carved BAPE out as a separate business in a privatization and restructuring of Hong Kong-based I.T Ltd., betting its cult following among young consumers will continue to fuel growth. Sales of street wear brands have grown, on average, about 30% in China, 13% in Japan, and low-teens in the U.S. a year between 2016 and 2019, according to the consultant Oliver Wyman. All are key markets for BAPE.

Even so, expanding physical stores comes as the apparel and retail sectors have been upended by the pandemic. Online shopping has boomed and consumers have moved away from discretionary items in favor of groceries and other essential goods. The shift away from luxury clothing also coincides with street wear’s increasing focus on cultural significance over prestige collaborations.

CVC also plans to expand its digital offering to cater increased online demand as a result of COVID-19, Jiang said.

Jiang declined to comment on the size of CVC’s investment in BAPE.

VF Corp. last year bought street wear heavyweight Supreme for $2.1 billion, marking its biggest acquisition since it snapped up Timberland in 2011 for $2.3 billion. The Denver-based company also owns Vans and the North Face brands.

The acquisition of BAPE represents a continuation of CVC’s consumer brand strategy, said Hans Wang, a managing partner at CVC, who sees Supreme as the brand’s closest competitor. “Our goal is to leverage the global network of CVC to help accelerate BAPE’s next phase of international growth and expansion.”

The firm previously acquired the premium Swiss watchmaker Breitling, and has also invested in MAP Aktif Adiperkasa, which distributes brands such as Nike, Adidas and Hasbro in Indonesia, and owns a stake in Tendam, the second-largest specialized clothing retailer in Spain.

CVC has about $118 billion in assets under management and $162 billion in funds committed, according to its website. Its focus in Asia is to invest in businesses primarily in the consumer and service sector, with an enterprise value of 250 million euros to $1.5 billion euros, it says.

As part of the privatization, I.T’s founder Sham Kar Wai will separately own and operate the company’s other retail business that distributes brands including Alexander McQueen, Off-White and Gucci. CVC now co-owns BAPE with Sham.

Founded by the Japanese artist Nigo in 1993, BAPE has more than 7 million followers on Instagram, the largest following among global street fashion and lifestyle brands. Its line up of labels includes A Bathing Ape, AAPE, Baby Milo, BAPE Black, and Mr. Bathing Ape, which are sold in stores across Asia, North America and Europe.

©2021 Bloomberg L.P.

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