Designers showing at Olympus Fashion Week, beginning tomorrow, might want to brush up on their Korean, Arabic and Icelandic.
Foreign investors are expected to flood the tents of Bryant Park this year like never before, driven, in part, by the weakness of the dollar, but also by the flood of new design talent showing here, sources said.
Companies on the hunt for investments include Korean telecommunications and electronics giants SK Networks and Samsung, as well as the Baugur Group of Iceland, which recently took an 8 percent stake in Saks.
SK Networks already has a minority stake in Richard Chai, and Samsung, through its fashion and design fund, backs designer Doo-Ri Chung and owns Fubu, the urban clothing chain.
“SK Networks is very interested in M&A in the U.S.,” said a former employee.
A representative of SK Networks did not return an e-mail message seeking comment.
Executives from Samsung and Baugur were not immediately available.
Foreign buying of U.S. companies is on track to hit an all-time record this year, according to Thomson Financial.
Though overseas acquisitions of U.S. fashion and retail companies have so far lagged the broader market, the pace could be poised for an uptick with the recent announcement of several high-profile deals.
Barneys New York was the target of a bidding war in which Istithmar of Dubai beat out Japan’s Fast Retailing, agreeing to pay an astounding $942.3 million.
Meanwhile, the Valentino Fashion Group of Italy recently acquired a 45 percent stake in U.S.-based Proenza Schouler,
“Given the weakness of the dollar, you would expect to see even more of these types of deals than we are seeing,” said Gilbert Harrison of the investment bank Financo.
One reason for the caution, according to Harrison, is that foreign investors have not always fared well in U.S. retailing, which can be more competitive than in Europe or Asia.
French textile and industrial firm Agache-Willot, a predecessor to LVMH Moet Hennessy Louis Vuitton, suffered from a disastrous investment in American discount chain Korvettes, which went bankrupt in 1980.
British department store retailer Marks & Spencer unloaded Brooks Brothers in 2001 for $225 million, far less than the $750 million it paid for the chain in 1988.
But as manufacturing has moved overseas in recent years, it makes increasing sense for designers to strike allegiances with the companies that make their goods.
That was the case with Charles Nolan, whose business partner Helen Noh had a longstanding relationship with Tejan, an apparel manufacturer based in her native Korea.
In February, Tejan took a 40 percent stake in Charles Nolan for a reported $10 million.
Not every foreign suit in the front row results in a deal, however.
Sometimes the terms are too onerous; other times it is the glamour of Fashion Week, not the investment opportunity that is the draw.
“The Russians pretend to be investors,” said Kelly Cutrone of People’s Revolution, which is organizing the fashion shows of several designers, including Alexandre Herchcovitch.
“But what they really want is for you to put their girlfriend in a fashion show.”