Faherty Brand, a California-based clothing company known for its sustainable practices and coastal-inspired designs, is considering selling a minority stake in the business to fuel its growth plans. The company has engaged investment bank Houlihan Lokey to explore strategic options, including a potential sale of a minority stake, according to people familiar with the matter, who asked not to be identified because the discussions are private. Faherty could seek a valuation of more than $500 million in a deal, the people said..
Faherty’s move to explore a minority stake sale comes as the apparel industry grapples with a challenging retail environment, with many brands struggling to keep up with changing consumer preferences and the rise of online shopping. Faherty, however, has been able to navigate these challenges and has seen strong growth in recent years. The company’s sales have more than doubled since 2017, and it is on track to generate more than $200 million in revenue this year, according to a source close to the company..
Faherty’s success is due in part to its focus on sustainability. The company uses organic and recycled materials in its products and has a commitment to ethical manufacturing practices. Faherty also has a strong brand identity, which has resonated with consumers looking for high-quality, sustainable clothing..
If Faherty does decide to sell a minority stake, it would be the latest in a series of investments in sustainable fashion brands. In recent years, a number of investors have poured money into companies that are focused on sustainability, including Patagonia, Allbirds, and Reformation..
A minority stake sale could provide Faherty with the capital it needs to expand its operations and reach new markets. The company could also benefit from the expertise of a strategic partner, such as a larger fashion brand or a private equity firm..
Faherty’s decision to explore a minority stake sale is a sign of the growing demand for sustainable fashion. As consumers become more aware of the environmental and social impacts of the fashion industry, they are increasingly looking for brands that are committed to sustainability. Faherty is well-positioned to capitalize on this trend and could become a major player in the sustainable fashion market in the years to come..
