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Proenza Schouler hoping to find more success with new investors backing them

By Kristopher Fraser

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Business

New York - Proenza Schouler has managed to make quite the name for themselves with CFDA awards under their belt, and a list of celebrity clientele like Kim Kardashian and Beyonce.The label founded by Jack McCollough and Lazaro Hernandez has become one of the most highly coveted luxury brands in America. As a result of their fame, the brand has long been an object of affection for investors and corporations specializing in acquisitions. Rumors once flew that Proenza Schouler would be acquired by luxury conglomerate LVMH Moet Hennessy Louis Vuitton, but, they proved to be untrue.

Either way, it seems that the brand has found their first major investor. Castanea Partners, an equity firm that specializes in helping small to mid-size businesses grow, has bought a minority stake in the brand. While the terms of the deal are being kept tightly under wraps for now, Castanea traditionally invests anywhere between 15 and 75 million dollars into a company.

Castanea Partners investing in Proenza Schouler

Castanea Partners will also be receiving two seats on Proenza's board of directors. Existing members of the board currently include Andrew Rosen of Theory, Rose Marie Bravo, the former CEO of Burberry, and John Howard of Irving Place Capital. The most interesting part of this business deal is that one of the two new seats will be going to Ronald L. Frasch, the former President and Chief Merchandising Officer of Saks Fifth Avenue who departed the company in 2013 when it was acquired by Hudson's Bay Company. Shirley Cook, who has been chief executive of Proenza since it was founded in 2002, will be stepping down.

Frasch joined Castanea partners in February 2014 with the commitment to focus on luxury apparel and accessories. The company's new investment in Proenza proves that he is certainly doing his job. Proenza will actually be the first women's wear brand that Castanea Partners has acquired. Proenza is certainly continuing to make its footprint in the fashion world.

The brand recently signed a perfume deal with L'Oreal. McCollough and Hernandez have also expressed their desire to go into men's wear, so these new investment partners could help them see some major changes for their company. So far, they have also elected to keep their brick-and-mortar retail footprint small, but, with a new investment partner backing them that could change. They haven't made any formal announcements to open more stores yet, but, the idea could easily come up with new board members and more capital behind them.

They currently only have 10 freestanding boutiques, although they are sold in over 200 countries. Frasch is the ideal man to lead Proenza Schouler into a new era given his years of expertise at Saks Fifth Avenue, but seeing a return on investment and expanding a brand is quite a task in the luxury retail sector. The effect that this new partnership will have on Proenza's future will be seen in just a few short months at NYFW in September.

Proenza Schouler