Jimmy Choo founder Tamara Mellon puts the boot into private equity; They come in and raid – raid your bank account and take your accomplishments. It’s all about fattening the pig for the slaughter, with no care about the people or the product. They came in, their only focus was their exit strategy, [and] on exit, you are thrown to the wolves.”

Jimmy Choo founder Tamara Mellon puts the boot into private equity

The Jimmy Choo co-founder wants to boot private equity out of fashion.


Tamara Mellon co-founded Jimmy Choo in 1996, after a stint as Vogue’s accessories editor Photo: Rex Features

By Katherine Rushton

9:00PM BST 28 Sep 2013

The first fashion collection Tamara Mellon will produce under her own name includes an extraordinary garment called “Sweet Revenge” – a pair of tight-fitting leather leggings that end with high-heeled boots. The Jimmy Choo co-founder is counting on this item to put her new venture on the map. The name is deliberate. It is, she says with a wry laugh, an example of the kind of innovation that was all but bled out of the luxury shoe label before her departure in 2011. Mellon, 46, takes a dim view of the private equity industry’s compatibility with the fashion business, or any creative endeavour for that matter, after a bruising decade at Jimmy Choo while it was being passed between different private equity owners. “They’re the sociopaths of investment banking,” she says. “They come in and raid – raid your bank account and take your accomplishments. It’s all about fattening the pig for the slaughter, with no care about the people or the product. “I’ve been through three private equity deals, and it was the same thing, every time. They came in, their only focus was their exit strategy, [and] on exit, you are thrown to the wolves.”She does not mince her words, either in her sunny Manhattan office, or in her new book, In My Shoes. Mellon returns to the topic again and again, likening private equity investors to “vultures”, drugs, abusive boyfriends and cruel “feed-lot farmers”.

The London-born designer is not the first entrepreneur to say they have fallen foul of the private equity industry, but her tale is certainly more tumultuous than most.

It is also more high-profile, thanks to her celebrity friends and the backdrop of her bitter divorce from New York financier Matthew Mellon.

She also drew a certain amount of attention when, in 2010, she posed for America’s Interview magazine, entirely naked but for a pair of heels and a strategically-placed cat.

Mellon co-founded Jimmy Choo in 1996, after a stint as Vogue’s accessories editor, where she used to order hand-crafted high heels from Jimmy Choo, a Malaysian-born shoemaker who was working in Hackney.

His designs had already become a favourite among magazine editors and Mellon’s investment, helped by a loan from her father, the late Vidal Sassoon investor Tom Yeardye, began the journey of building Jimmy Choo into a major global brand.

Developing the business was never plain sailing. Jimmy Choo may have been a useful frontman, but behind the scenes, Mellon claims, he had less and less input into the designs and clashed with Mellon and Yeardye over their plans to expand into America.

The first of many falling-outs at the helm of the shoe business, it was resolved only when Choo agreed to sell his stake. He insisted that it went to a third party.

Phoenix Equity Partners bought out Choo for £9m, on the proviso that it would hold 51pc of the business, and installed Robert Bensoussan as chief executive. Mellon paints him in the book in an unflattering light, claiming he resented her high profile as Jimmy Choo’s glamorous creative chief. “There I was coming into the office every day trying to do the best job I could, and I didn’t realise there was this campaign going on behind my back – of gossip, petty gossip to try and diminish me. It was typical things that people call a woman: a diva, difficult, she’s not a team player.”

Bensoussan says that he would like to let the facts of Jimmy Choo’s extraordinary growth “speak for themselves”. “Jimmy Choo remains by far the best example of the value creation that private equity can bring in the luxury goods industry,” he said this weekend.

When she talks about the design process, Mellon takes on a very different tone from when she lambasts the vagaries of private equity.

Her eyes light up and she becomes animated. “It’s like a rush. You get into a zone and it’s a fly of energy that must be releasing some kind of dopamine or endorphins, because we all feel so connected in the room,” she says.

She could sound insubstantial, were it not for her apparent resilience. Even Mellon’s enemies must be impressed by her ability to dust herself off and re-enter the corporate boxing ring so many times.

After Phoenix came Lion Capital, a private equity firm co-founded by Lyndon Lea, the financier who was catapulted into the limelight this year after the horse-meat scandal put a hole in his investment in Findus, the frozen foods maker.

Lion insisted on keeping Bensoussan at the tiller. Mellon acquiesced. Her father had just died and, she says, she didn’t have the stomach for a battle.

“Lyndon Lea came to about two board meetings in two years,” Mellon said. “He just sent in one guy to check the numbers once a month. He claimed they added value – where were they?” she says.

Lea claims it was Mellon who was barely present at meetings, and “not particularly active in the company” at all.

“She was barely engaged with the business during the period of our ownership. Sandra Choi [the niece of Jimmy Choo’s wife, Rebecca] designed the collection and Robert Bensoussan ran it as chief executive,” he told The Sunday Telegraph. “Tamara was the public face but did not play an active operating role and was rarely at the company’s offices.”

The man sent “to check the numbers” was Lion co-founder Robert Darwent, who subsequently bought the plot next to Mellon’s house in the Hamptons. Neighbourly proximity has not thawed a relationship that froze over permanently when Mellon discovered that Lion and Bensoussan had been courting buyers for the company. By the time she found out, Bensoussan was in advanced talks with TowerBrook Capital Partners to back him in a management buy-out, which, she says, would have seen Mellon’s role reduced to a non-executive position as “brand ambassador”.

Mellon managed to persuade TowerBrook to switch allegiances, backing her instead.

TowerBrook wanted to sell the company without Mellon, proposing to tell buyers that it had “bottled the essence of Tamara”. Mellon decided she’d had enough in 2011 and quit the business, shortly after Jimmy Choo had been sold to the family-owned Labelux.

Mellon is not the first fashion designer to lose control of what was initially her own company. Amanda Wakeley spent a year apart from the womenswear label that bears her name, after it was bought by Arvoco, an investment vehicle owned by Jason Granite. She returned only when she bought the company back.

Lion Capital also had a falling-out with All Saints founder Kevin Stanford, and ousted him from the company last year. Less than a decade earlier, Stanford and the Icelandic private equity firm Arev invested in Ghost, and hastened the exit of its founder, Tanya Sarne.

Mellon says her “heart sinks” whenever she hears of another designer taking private equity money. It is a world that has not grasped luxury fashion, she says, because it regards creative leaders as irritants rather than as assets.

“They think a company is more valuable without one person attached, when it can operate as just a big commercial business – but what they don’t realise is that Jimmy Choo was just 15 years old [when it sold to Labelux]. It’s not Vuitton, which is around 150 years old, nor Dior. They’re different.”

Mellon also says that part of the problem is that successful businesswomen are often criticised for their ambition in a way a man never would be.

She is now one of David Cameron’s business ambassadors for Britain and says that women must shoulder more responsibility for changing attitudes and for helping other women up the career ladder.

“When you look at the research, the opposite of all those myths is true – that we’re not ‘team players’ or that we’re ‘difficult’. Actually, women are more collaborative. When a woman goes in to do a deal, she wants everybody to win and she is happy that everybody wins. She’s not as greedy.”

In Mellon’s view, greed will be the ruin of the fashion industry. Investors continue to pile in to luxury labels, drawn to their fat profit margins, apparent immunity to recessions and fast-growing demand for upmarket brands from Asia’s burgeoning middle classes. But their necessary investment often sets up a clash of cultures with the creative people at the heart of the business.

“There is too much pressure on the designers,” Mellon said. “There is no space in between the collections to regroup. You are seeing less innovation because of that. I believe that what is going to happen to the fashion business is like what happened to the music business – [the model] is so outdated, and it’s going to suffer because of it.”

Mellon’s new label, she says, takes a different approach. Instead of debuting designs on the catwalk, far ahead of their appearance in-store, Mellon’s new line will deliver a collection every two months, available immediately. Shoes will be a notch cheaper than Jimmy Choo’s, but, she insists, of the same quality.

“The customer doesn’t want to buy something and wear it in four months, she wants to wear it tomorrow. Business has not caught up with the consumer yet,” she says. If it’s a success, will she sell to private equity? Mellon lets out a deep laugh, that I think translates as “not likely”.

Mellon roots around a rail of clothes so that she can find her ground-breaking “Sweet Revenge” trouser-boot. As she does so, I spot a pair of worn Jimmy Choos neatly paired by the desk. Does she still wear them, I ask?

“Oh – no,” Mellon responds, looking momentarily surprised. “Those are my old life.”

Best foot forward: timeline of Jimmy Choo


Tamara Mellon persuades Jimmy Choo, a little-known Malaysian shoemaker based in Hackney, to launch a luxury shoe label under his name


Jimmy Choo is catapulted to fame after its lilac and blue “feather shoes” are featured on Sex and the City


Phoenix Equity Partners buys Choo’s stake for £9m, gaining 51pc of the business


Lion Capital buys Jimmy Choo for £100m. Both Tamara Mellon and Robert Bensoussan are tied in to the new business


Choo licenses his name and opens a new fashion label, Jimmy Choo Couture


TowerBrook buys Jimmy Choo for £225m, backing Mellon rather than Bensoussan


Jimmy Choo named Designer Brand of the Year by the British Fashion Council


David Cameron names Mellon one of Britain’s Business Ambassadors


TowerBrook sells Jimmy Choo to Labelux for £525.5m

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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