Intermix, which has been looking for a strategic partner since August, is currently in discussions with Gap Inc., Zee has learned.
The specialty store hired investment banking firm The Sage Group to explore its options on how to fund an expansion plan.
Khajak Keledjian, founder and chief executive officer of Intermix, said Thursday, “Intermix is currently in discussions with Gap Inc. We are excited to potentially align with this iconic retailer to capitalize on the significant growth potential within the luxury market. As we are in the midst of the due diligence process, we cannot comment further.”
A spokesman for Gap said, “Gap Inc. is currently in discussions with the owners of Intermix, a leading multibrand, luxury retailer with stores in major cities in the U.S. and Canada. We’re excited by the brand’s business model and strong customer loyalty. And the luxury market offers significant growth potential within retail. Given that we are in the midst of the due-diligence process, it is too early to comment further.”
It wasn’t immediately clear how a partnership would be structured, or even how long the due-diligence process would take. Sources said the two are exploring different possibilities, and are not ruling out an acquisition.
Intermix specializes in contemporary apparel and accessories that are both feminine and luxurious, and showcases them in its stores by look and lifestyle rather than by brand or category. It’s the lifestyle focus on merchandising, particularly at the local store level, that seems to have brought back the consumer following the downturn in 2008, when the economy tanked and Intermix found itself in turnaround mode.
The chain works with 220 brands, although not all are represented in each store. Some of the designers found at Intermix include Willow, Milly, Vince, Gypsy 05, Stella McCartney, Rachel Zoe, Rag & Bone, Helmut Lang, Matthew Williamson, Bella Luxx, Alexis Bittar and 10 Crosby. It mixes established luxury designer labels with up-and-coming brands.
The 19-year-old chain, founded by Keledjian and his brother Haro, opened its first store in Manhattan’s Flatiron District. Intermix now has six stores in New York, with a seventh on the Bowery slated to open this spring. There are 33 stores in total, including an international location on Bloor Street in Toronto.
The company is profitable, according to financial sources. They said the company’s been having double-digit comparable-store sales growth and had an annual volume of between $125 million to $150 million in 2011.