November 7, 2012
Bahrain-based alternative asset manager Investcorp is purchasing Danish luxury retailer Georg Jensen for $140 million. Experts agree that this move will only propel the brand.
Investcorp will purchase Georg Jensen from private equity group Axcel Capital Partners. As part of this transaction, Investcorp has teamed up with luxury brand entrepreneur and Nautica founder David Chu who will join the company as chief creative director and co-chairman of the board.
"Our backing means that the company will become more global in outlook and will have the means to step up its game while staying true to its heritage, which we respect and feel attracted by," said Hazem Ben Gacem, head of Investcorp's European corporate investments activities.
"Georg Jensen will benefit from Investcorp's experience and relationships in the hard luxury sector as well as from our ability and willingness to support the company with capital to drive growth," he said. "This transaction represents the start of an exciting journey for Georg Jensen.
"Our strategy is based on geographic expansion in both Europe, where we will leverage the existing brand awareness in those markets, as well in Asia where we see significant potential for this brand."
Georg Jensen did not respond before press deadline.
A wise investment
Georg Jensen currently has 94 fully-owned stores and three franchised stores worldwide.
The company's history spans more than 100 years. Its business centers on jewelry, watches, fine silverware and high-end homeware.
Georg Jensen Web site
In 2011, Georg Jensen had sales of approximately $160 million, per Investcorp.
“It is a very positive step for Georg Jensen,” said Milton Pedraza, founder/CEO of The Luxury Institute. “It is a great brand, but brands need to be rejuvenated.
"Investcorp has great management, and I expect it will bring great things for Georg Jensen," he said. "It is not all about the product and stores, but customer experience is important to improving a brand.
“We know that if you dramatically improve a product and experience, you will in turn improve customer retention rates and profits will go up."
The new acquisition by Investcorp could help Georg Jensen expand.
“It could be the best thing that ever happened to Georg Jensen,” said Al Ries, chairman of marketing consultancy Ries & Ries, Roswell, GA. “The enormous resources of Investcorp will allow the management at Georg Jensen to expand the brand.”
Also, Investcorp could make a small fortune on its investment, per Mr. Ries.
Investcorp Web site
Teaming up with Mr. Chu will likely aid in cultivating a global luxury brand.
Mr. Chu will join the board along with Guy Leymarie, former CEO of De Beers, Cartier and Dunhill.
“He is a great creative director,” Luxury Institute's Mr. Pedraza said. "While maintaining its DNA, David Chu will add his own take on the brand."
Investcorp has previously invested in other luxury brands such as Tiffany & Co. and Gucci.
The 100-year legacy and the unique Scandinavian design DNA are not the only features that help set Georg Jensen apart.
Also, the unique name of the retailer could help propel it forward.
“Georg Jensen is a particularly good brand name and Investcorp obviously recognized the potential,” Mr. Ries said.
“It is a name that can easily be pronounced by English-speaking consumers and the absence of the 'e' in the name lends the brand an aura of mystique and exclusivity,” he said.
Erin Shea, editorial assistant on Luxury Daily, New York