Why Mark Ein invested in designer handbags - Washington Business Journal (blog)

Enlarge

Venturehouse Group founder Mark Ein

For Mark Ein^[1] , buying a stake in luxury fashion brand Reed Krakoff^[2] might seem like more than a small departure from his investment strategy. Ein, founder of District-based Venturehouse Group, owns the Washington Kastles and Kastle Systems Intl. He's in security, tennis and a lot of tech. And now he's in designer handbags.

Ein, along with Danaher Corp. co-founder Mitchell Rales, T. Rowe Price Associates and Krakoff himself led the $50 million buyout^[3] of Reed Krakoff^[4] from its parent Coach Inc. earlier this month. It's no doubt a new industry for Ein. But in an interview Tuesday, he calls the deal "100 percent consistent with what I've been doing and what I want to do."

"Really, what I've been doing is finding really interesting businesses where they're either owned by the wrong owner, or we think we can be a catalyst to creating value," Ein told me. "And try to focus on a small number of companies and grow them into truly great companies over a long time period."

He sees the Krakoff buyout, more or less, as akin to a "traditional technology growth oriented" investment. Krakoff, Coach's former creative director, has already achieved market acceptance for his namesake product line, Ein said. "What he needs now is to scale it." Scaling, in this case, means opening new storefronts and expanding wholesale distribution for the newly independent brand.

Krakoff, in a separate interview Tuesday, said the D.C. area is among the several markets he's eyeing for bricks-and-mortar expansion. Exactly where they land isn't yet determined. It safe to say any Reed Krakoff^[5] stores would locate around other established high-end retail clusters, areas like Georgetown and the Tysons Galleria. Krakoff suggests Chevy Chase as a possibility. "Areas in the Washington region that can support luxury business that are already are having great success with international luxury brands will be where we could look seriously."

Coach remains a minority shareholder in Reed Krakoff^[6] .

Bill Flook covers technology, biotech and venture capital.

References

1. ^{^} Mark Ein (www.bizjournals.com)


2. ^{^} Reed Krakoff (www.bizjournals.com)


3. ^{^} $50 million buyout (www.ft.com)


4. ^{^} Reed Krakoff (www.bizjournals.com)


5. ^{^} Reed Krakoff (www.bizjournals.com)


6. ^{^} Reed Krakoff (www.bizjournals.com)