Fashion Mogul Tory Burch Settles With Her Ex (And Gets A Third Billionaire Investor)


Tory Burch. Credit: Patrick Demarchelier. Photo courtesy of Tory Burch.

You heard it here first: 2013 will be the year of Tory Burch. On January 1st, the fashion mogul’s company made two big announcements, both of which will renew speculation of an impending IPO that would likely land the 46-year-old on Forbes’ Billionaires List.

The board at Tory Burch’s eponymous brand and the designer’s ex-husband Chris Burch have settled “all pending legal claims”, per a statement, putting an end to an increasingly nasty and public battle of lawsuits and counterclaims.

The trouble between the one-time couple began last year when Chris launched C. Wonder, a preppy clothing chain bearing a striking resemblance to Tory’s multi-billion dollar brand, but at a far cheaper price. Since then, Chris has been forced off the board of Tory Burch LLC, but retained a 28.3% stake in his ex-wife’s company (Tory also owns 28.3%).

In October, Chris sued Tory and the majority of her company’s board, alleging they were trying to hinder his relations with suppliers and hamper his attempt to sell some of his stake. Tory Burch LLC countersued in November, claiming C. Wonder “is a knockoff brand…with mass-market versions of the top-selling Tory Burch items.” (You can judge for yourself: scroll through the images in this counterclaim.)

Now, Chris has sold part of his 28.3% stake to two new minority investors, both with serious pedigrees: BDT Capital Partners, investment vehicle of Warren Buffett’s favorite banker Byron Trott; and General Atlantic, a private equity firm founded by secretive philanthropist Chuck Feeney, initially to invest on behalf of his foundation. Feeney would be worth $7.5 billion today thanks to his empire of duty free shops if he hadn’t long ago made the decision to give all his money away by 2020.

Feeney is the third big billionaire name to be linked to the growing fashion house, which brought in $800 million in revenues in 2012 according to private company database PrivCo.

In 2009, Tory Burch LLC sold a minority stake of approximately 20% to Mexican private equity firm Tresalia Capital, chaired by Corona beer heiress María Asunción Aramburuzabala of the Group Modelo family, once described by Forbes as the richest woman in Mexico until her father’s death split her fortune.

More recently, Warner Music honcho Len Blavatnik invested for a minority stake and was designated a seat on the board. Blavatnik also has financial interest in Chris Burch’s businesses, landing him at the center of a motion to compel evidence in December.

This week’s settlement and announcement of new investors could well pave the way for a public offering, although Tory Burch herself has been careful to quash speculation of an imminent float that would likely make her a billionaire. In a November interview with CNN, she dismissed talk of taking her growing brand public, citing her privacy as paramount:

It’s not something I’ve ever thought about clearly and it’s not going to happen anytime soon. I am personally not ready to be a public [chief executive officer]. Privacy [is what I would lose.] I am not saying exactly that one day it won’t happen but for now it’s not in the cards.

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