Sequoia Capital China bets on contemporary Norwegian label Holzweiler

Sequoia Capital China bets on contemporary Norwegian label Holzweiler

Contemporary Norwegian brand Holzweiler has built a dedicated fan base for its well-constructed basics with a Scandi-chic twist. Now it is eyeing global expansion with backing from venture capital firm Sequoia Capital China.

The venture capital firm is taking a majority stake in the brand in a deal announced on Monday. Financial terms were not disclosed, but the brand’s founders, brothers Susanne and Andreas Holzweiler, and creative director Maria Skappel Holzweiler (also Andreas’ wife) will retain a minority stake.

The investment comes at a difficult time for emerging fashion brands as soaring inflation and a looming recession raise fears that customers will cut spending. Typically, the already crowded and competitive contemporary market suffers the most during economic downturns as buyers fall back on high-end luxury investment pieces or value-driven purchases from mass-market retailers. , if they spend at all.

But in recent years of upheaval, a handful of contemporary brands have shown resilience through strong business models, strong customer relationships, and savvy marketing and brand positioning that have given them cachet on issues. tricky things like sustainability and responsible production.

Perhaps the most successful example of this strategy is Danish label Ganni, which was bought by L Catterton in 2017. The LVMH-backed venture capital firm is said to be exploring a sale that could add value to the business up to $700 million.

“There is still disposable income to spend as long as…brands meet the needs of these consumers [with] good quality, timeless pieces,” said Fflur Roberts, global head of luxury goods at market research firm Euromonitor International.

Since its inception in 2012, Holzweiler has leaned into its own version of this playbook. It launched with scarves, flagship products that helped it carve out an early niche. He branched out with collaborations that garnered cultural cachet inside and outside the fashion world – from designing a hoodie for Sarah Andelman’s Parisian concept store Colette to launching a fine dining restaurant in Oslo.

The company expects consolidated revenue of around $50 million this year, up 60% from 2021. The brand has been profitable since day one, Andreas Holzweiler said.

Thanks to Sequoia’s investment and the expertise of its new owner in the Chinese market, the brand aims to exceed 100 million euros (102 million dollars) in sales. It plans to expand its physical retail footprint, starting with a flagship store in Copenhagen, Denmark, in October and its first store in London in spring 2023. Store openings in major US and Chinese cities will follow, the brand also launching with Chinese online luxury. Tmall seller next month.

The move comes after around six years of brand development and three years of business development, which included the hiring of its first marketing director in March this year.

“You get to certain points [of] growth, where you can take things organically and you can build a strong backbone for your brand,” Andreas said. “But I think it gets to a point where if you want to globalize the brand…you both need more in-house knowledge, but also the scale and the knowledge [of an investor].”

Since early 2021, the Chinese branch of Sequoia Capital has strengthened its fashion portfolio to include Parisian brand Ami and contemporary South Korean brand We11done, both with a view to global expansion. He also has a minority stake in luxury e-commerce company Ssense and Chinese high-speed fashion juggernaut Shein.

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