Billionaire investor Ron Burkle (above) is hoping to hang with the hipsters by making a play for menswear designer John Varvatos, who has drawn inspiration from such rock ’n’ roll icons as Alice Cooper and Iggy Pop. (Startraks)
Rock ‘n’ roll fashion designer John Varvatos may soon get rescued from years of corporate bondage.
The grungy New York menswear label — whose rumpled tweed jackets and scuffed-up Converse sneakers have long been a staple for downtown rockers — is close to a sale that could fetch upwards of $80 million, The Post has learned.
Looking to break free from the ownership of VF Corp. — a North Carolina-based clothing conglomerate that owns Lee and Wrangler jeans — Varvatos was expected this week to take a bid from Lion Capital, a London buyout firm.
But Lion, whose investments include American Apparel and the goth-inspired All Saints clothing chain, may get competition.
Billionaire Ron Burkle, who recently was thwarted by Lion as he attempted to seize the senior position among American Apparel’s creditors, was also seen as a possible bidder for Varvatos, sources said.
Officials at VF and Lion didn’t respond to requests for comment yesterday. A spokesman for Burkle declined to comment.
The prospect of a bidding war for Varvatos raises “a better than 50-50 chance” that the label will have a new owner early next year, according to a source.
That’s despite the fact that the brand — whose rock star clientele has included Iggy Pop, Alice Cooper and Slash — has been on the block for the past two years. As reported by The Post, Varvatos was in talks late last year with as many as four potential acquirers.
Those discussions fell apart, as none was willing to meet VF’s demand for a price that matched the valuation of the company’s stock.
This year, however, Varvatos finally has reversed years of negative cash flow, sources said. His growing chain of fashion boutiques has racked up sales gains of more than 20 percent, fueling revenue of about $80 million, according to people briefed on the label’s performance.
“There has always been tremendous potential for this brand, and you’re starting to see it this year because they’re really getting the product right,” says Richard Kestenbaum, partner at Triangle Capital, a New York investment bank.
In August, Varvatos hired as its new chief executive Robert Wichser, a retail turnaround whiz who previously managed retail labels for Burkle, including the Sean John hip-hop line and the trendy Scoop fashion boutiques.
This fall, Varvatos’ margins are widening as the brand continues to open new stores, sources said.
Varvatos suffered a setback this summer when the designer demanded more floor space from Saks Fifth Avenue, and pulled out when the retailer balked, sources said.
Business elsewhere, however, has been brisk.“They’re on fire at Bloomingdale’s and Nordstrom,” according to a source close to Varvatos.