October 1, 2023

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Zimmermann becomes Australia’s first billion-dollar fashion label after private equity acquisition | Fashion industry

Zimmermann has become Australia’s first billion-dollar fashion label after a majority acquisition by private equity firm Advent International.

The label’s founders, sisters Simone and Nicky Zimmermann, have retained a minority shareholding in the brand and said the company would continue to be run by them and current management.

Advent International acquired a majority stake in Zimmermann from Italian private equity firm Style Capital. The financial terms were not disclosed, but two people close to the matter told Reuters the transaction valued the brand at around 14 times its core profit, meaning around US$1.15bn (A$1.76bn).

Zimmermann has revenue of US$260m and a more than 30% core profit margin, the people said.

The investment by Advent would allow Zimmermann to speed up expansion abroad, including in Asia and the Middle East, and boost its distribution network including e-commerce, said Advent, Zimmermann and Style Capital in a joint statement.

Simone and Nicky Zimmermann at a Zimmermann function in the Hamptons, New York state, in June. Photograph: Lexie Moreland/WWD/Getty Images

Sydney operations are unlikely unaffected by the deal. Rajan Sen of Advent International said in a statement: “We look forward to supporting the management team around the CEO, Chris Olliver, and Nicky and Simone Zimmermann.”

Known for its high end swim and resortwear, the label got its start as a stall at Sydney’s Paddington markets in 1991. There are now 58 Zimmermann boutiques worldwide, including 22 in Australia and 22 in the US, alongside a presence in top department stores.

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In 2022, after a decade of showing at New York Fashion Week, the label moved its collection presentations to Paris, where it also opened a European head office on Rue Saint Honoré.

Retail and consumer goods are two of the sectors targeted by Advent, whose company portfolio includes activewear brand lululemon, perfume brands Parfums de Marly and Initio Parfums Privés, beauty retailer Douglas and make-up brands bareMinerals, BUXOM and Laura Mercier.

Zimmermann is the second Australian lifestyle brand to reach an eight-figure valuation this year. In April, L’Oreal acquired Melbourne-founded skincare company Aesop in a deal worth $3.7bn, although the brand’s founding family no longer had a stake in the company at the time of acquisition.

Advent, the Zimmermann sisters and Style Capital were unavailable for further comment.