What the Lilly Pulitzer Sale Means

Hello-Hello, what a delightful Wednesday it is here at The Prepatorium, albeit it a little harried.

We shift directions today in light of yesterday’s big announcement that Lilly Pulitzer has been sold to Oxford Industries.

Via Fibre2Fashion.com

We have had a few queries on the topic, and thought it best to look at this development rather than engaging in our usual blather and drivel our planned post more relative to seasonal goings-on.

Back to the deal: Oxford was prepared, posting a link on its home page to “a retrospective look at the Lilly Pulitzer brand” via a You Tube video.

The clip offers a nice look back at Lilly history, including images of patterns and prints, iconic designs and celebrities in Lilly.

Oxford also co-hosted a conference call with Lilly’s management team to share details about the sale and what it portends for the future.

First a bit of background on Oxford. The company owns Tommy Bahama

And Ben Sherman.

Courtesy Photo via WWD

Here is how the Times’ Dealbook described the purchase:

“In the world of deal-making, prep is still in, and pink is looking awfully pretty.

“One month after J. Crew agreed to sell itself to two buyout firms, the parent company of Lilly Pulitzer — the maker of eye-catching dresses for the horsey set — sold itself on Tuesday to Oxford Industries for $60 million in cash.

And this from Michael de la Merced’s Dealbook story about on Lilly’s place on Planet Prep:

“No less an authority than “The Official Preppy Handbook” declared that the company’s golf skirt and beach dress were must-haves for Muffie and her friends.”

What does it all mean to us, the consumers? Here is what Lilly noted on its Facebook page:

“Good news travels fast! Here’s the juice…Sugartown Worldwide (the parent company of Lilly Pulitzer) was acquired by Oxford Industries. We are smiling ear to ear because everything will stay the same, only better. The company will be under the same leadership – aka Brad and Scott and everyone else here you adore. We are… in love with Oxford because they LOVE Lilly and want us to be JUST AS WE ARE, only more more more.”

From a WWD story on the acquisition:

“…the plan is to add to the Lilly Pulitzer stable of company-owned retail stores and enhance its e-commerce site, which launched two years ago and accounts for more than 10 percent of sales. E-commerce is viewed as “the biggest opportunity,”…”

Jean Palmieri’s story in WWD notes Oxford plans to add 4 to 7 new stores a year to the existing 16 corporate stores.  This may be good news in many respects, but there is significant anxiety from non-corporate stores, as all Tommy Bahama stores are owned by Oxford.

A few thoughts:

  • When a company is publicly traded there are different goals. Shareholders have profit expectations, and those expectations must be met. Having worked for both privately held and publicly traded media companies over the years, there *is* a difference. By the same token, Lilly Pulitzer is already engaged in making money, it hasn’t ever been a not-for-profit endeavor.  However, an additional $20 million dollars is on the table if Lilly meets certain earnings targets. It doesn’t take an MBA to recognize that amount of money can be a strong motivator in finding ways to meet such goals.
  • The current management team will remain at the Pink Palace.  Scott Beaumont and Jim Bradbeer, (CEO & President, respectively) brought the brand back from the grave and have demonstrated they know their stuff, we admire their business acumen. Those two gentlemen are very savvy marketers.
  • The Lilly Warehouse sales will remain in KOP (King of Prussia, home to the Lilly Mothership).

How will Oxford/Lilly react to customer concerns about quality, direction, and brand dilution? That is an unknown. Lilly Pulitzer has an extraordinarily passionate customer base, not quite on par with Apple (but close), with a devoted, almost-cult-like following.  Consumers know prints by name, specific garments by cut and style: the Bowen dress, Paley Cardigan, McKims sandals, and recently, the wildly popular Murfee scarf, to name just a few of the items buyers covet.  (Yes, we have a few favorites as well!) The Re-Lilly Facebook group has grown to more than 2700 fans in just one year, followers who buy, sell, swap and share Lilly merchandise, tips and tidbits.

Some believe Lilly is no longer as “special” as it once was. Messrs. Bradbeer and Beaumont have done a stellar job bringing the brand back from the grave, to be sure.  But recent collaborations have troubled some customers, the LeSportSac partnership seemed especially irksome to many, although it didn’t bother us.

The company has licensed or partnered with firms making everything from electric cars to cosmetics to stationery. (Full disclosure: we are sellers of the Lilly Pulitzer Stationery & Gifts line.)  The enormous Lilly Pulitzer Furniture Collection due out in the spring has sparked conversation as well. (More info and photos here.)  One area greeting the news favorably: the stock market, Oxford shares were up 22% as of this writing.

As Lilly’s executives noted on the conference call, they were not actively shopping the company, having declined previous approaches over the years. In this case conversations continued past the initial stage, and the offer transcended others in providing a solid “strategic and cultural fit,” according to Thomas Caldecot Chubb, III, Oxford’s president.

As with any transaction of this magnitude many factors are unknown. From a selfish perspective, we do love our Lilly, although we don’t live in it, in part because of the climate – The Great Midwest doesn’t encourage summer fashions year round. Sigh.  And we want to see the small, independent shops we love (hello Village Palm and many others!) continue to grow and thrive.  So we’ll cross our fingers and our toes, hoping that good things happen going forward.

More importantly, what do *you* think?

Advertisements

8 Comments

Filed under Lilly Pulitzer Paper & Gifts, preppy, Preppy clothing & brands, Preppy Fashion, preppy lifestyle, preppy stationery

8 responses to “What the Lilly Pulitzer Sale Means

  1. Fascinating! I outlined my thoughts in a post yesterday but agree with you on most all points! Should be FASCINATING to see where Lilly is going!

  2. Selfishly – I hope this means more inventory in my ‘hood. Maybe they’ll open a shop in Santa Barbara. And of course I would love to see styles for the older, ahem, more mature sized gal!
    xxoo
    Jennifer
    @atthebluebarn

  3. I’m really interested to see what the acquisition brings. I’m a long-time Lilly lover, but have found the past three or four years to bring wild fluctuations in quality of both design and construction. I’ve bought a few pieces that I count among my all-time favorites, but also have tried on more than a few that simply missed the mark.

    Corporate acquisitions are always such a double-edged sword. They seem to guarantee short-term sustainability, but there are so many horror stories about the impact of new ownership upon products and employees… Fingers crossed that the “New New Lilly” lives up to the fabulousness we all expect!!

  4. Someone shows up, says, here’s some capital, here’s our supply chain, here’re are our business processes and by the way you two are still in charge and get some $$$ for yourselves. What would you do?:)

  5. Jen

    Not sure. I’m actually new to the brand, finding it through you. I guess I’m not nearly as preppy as I thought. Let’s hope they keep making adorable items.
    Have a very Merry Christmas!

  6. Your blog is spot on. Being a long time Lilly Lover and part of the Lilly cult my heart sunk when I heard the news and then when I did some research on Oxford, listened in on the teleconference/webcast about the acquisition and learned that Jim & Scott are staying on board and keeping operations aka The Pink Palace in KOP I felt relief. I am thrilled to hear that there are plans to open 4-7 new Lilly stores per year. (I posted a blog about this too: http://re-lilly.blogspot.com/ not as fabulous as your blog post 😉 I hope to finally get a Lilly retail store near me and maybe get to finally work for Lilly one day (a girl can dream) for now I am loving the Re-Lilly community I started a year ago (Thank you so much for the mention here) and have to remain positive and optimistic for Lilly’s sake! I can only hope that this means things will continue business as usual or only get better. As Lilly herself said, “Too Much Lilly is Never Enough!” Cheers! XOX Sue

  7. thank you thank you for my little goody in my package! merry christmas tpp!

  8. lily

    this is crazy my name is lily and my dads name is Caldecot Chubb
    must have a connection just don’t know what it is! i dont even know who this lilly is…

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s