In a compelling turn of events in the fashion industry, the iconic jeans brand True Religion has recently been acquired by private equity firm Acon Investments along with SB360 Capital Partners, linked to American Eagle’s CEO, Jay Schottenstein. This acquisition marks a significant chapter in the lifecycle of a brand that has experienced its fair share of challenges, including multiple bankruptcies and shifting market relevance. Following two bankruptcies, the company went on the market last year, ultimately finding new backing that could facilitate its revival.
The specific financial terms of the acquisition remain undisclosed, yet market speculation suggests that True Religion was poised to sell at a mid-single-digit multiple of its earnings before interest, taxes, depreciation, and amortization (EBITDA). Remarkably, in 2023, True Religion reported a robust sales growth of 20%, reaching $280 million and generating an impressive $80 million in EBITDA. This rebound has paved the way for its new leadership to explore expansive opportunities buoyed by fresh investment and strategic direction.
CEO Michael Buckley, who has been pivotal in steering the brand into this new phase, expressed excitement about the partnership with Acon and SB360 Capital Partners. The collaboration is anticipated to bolster True Religion’s digital and retail capacities, foster international growth, and revolutionize its apparel offerings. Buckley’s vision is to transform True Religion into a brand that resonates with a modern and diverse consumer base while also leveraging the extensive resources and expertise of its new partners.
ACON, based in Washington, D.C., is notable for its diverse portfolio overseeing $7.2 billion in assets across consumer brands, which positions True Religion favorably within a robust investment strategy. SB360 is closely affiliated with Schottenstein’s retail network that includes well-known names like American Eagle and DSW, which could provide synergies vital for True Religion’s resurgence.
Once celebrated in the early 2000s for its luxury denim priced at around $300, True Religion found itself in decline by the 2010s, leading to its first bankruptcy in 2017. The brand’s extravagant pricing and aesthetic, once cherished by celebrities like Jessica Simpson and Britney Spears, had alienated it from its customer base. However, the company has made decisive strides to reposition itself by embracing a more accessible price point, with jeans now retailing for less than $100, making them competitive with industry leaders like Levi Strauss.
This strategic repositioning aligns well with a young, diverse consumer demographic that has emerged in recent years, typically earning between $60,000 and $65,000 annually. Buckley’s commitment to understanding and serving the modern consumer is crucial; he noted that the previous management’s approach was out of touch with contemporary consumer preferences. By recognizing the need for evolution, Buckley aims to reclaim the brand’s former glory while maintaining relevance amid changing fashion trends.
A significant factor contributing to True Religion’s rejuvenation is its clever marketing strategy spearheaded by Chief Marketing Officer Kristen D’Arcy. Acknowledging the importance of cultural relevance, the brand has engaged with prominent influencers such as Megan Thee Stallion and Jayda Cheaves—social media figures with millions of followers—to create buzz and generate intrigue around their offerings. By tapping into the nostalgia of Y2K fashion, True Religion has reinvigorated interest among younger shoppers who are increasingly inclined toward denim styles reminiscent of that era.
Furthermore, the recent revival of fashion trends related to the turn of the millennium, which have brought back brands like Ed Hardy and Von Dutch, could not have come at a more opportune moment for True Religion. By aligning its aesthetic with these trends, the brand has positioned itself not just for survival but for potential market dominance.
As True Religion embarks on this exciting new journey, the commitment to innovation, customer understanding, and strategic partnerships will be vital to its long-term success. The re-establishment of the brand as a household name hinges on its ability to adapt to the evolving fashion landscape, leveraging digital platforms for market reach and continuing to engage a diverse consumer base dynamically. If these elements are successfully implemented, there’s every chance that True Religion may not only regain its former prestige but could emerge as a billion-dollar brand in its own right. The fashion world will be watching closely as this storied brand writes its next chapter.