Platinum Equity takes a controlling stake in lingerie maker Hop Lun
- Kimberly Chin, author of Axios Pro: Retail Deals
Hop Lun makes intimate apparel for Victoria’s Secret and other brands. Photo: Artur Widak/NurPhoto via Getty Images
Platinum Equity, the private equity firm founded by the billionaire Tom Gores, is taking a majority stake in Hong Kong-based Hop Lun, the lingerie manufacturer that makes products for brands like Victoria’s Secret, H&M and Rihanna's Fenty.
Why it matters: The company, which is valued at roughly $500 million, per the Financial Times, sits in the nexus of a $42 billion global lingerie industry as of 2020 that is projected to reach about $80 billion by 2027, according to Statista.
- The intimates category has grown thanks in part to strong demand for comfortable wear and work-from-home garb during the pandemic.
- New upstarts like Parade and SKIMS have also emerged, offering more inclusive sizes that cater to Gen Z and millennial consumers who prize diversity and sustainability.
By the numbers: Hop Lun’s sales dipped in 2020 to $409 million but rebounded to reach $583 million in 2021.
- Financial terms of the deal weren’t disclosed. The transaction is expected to close in the third quarter.
State of play: Private equity funds are sitting on roughly $2.3 trillion in dry powder, according to law firm Wachtell, Lipton, Rosen & Katz.
- Deal watchers have told Axios they are expecting a flurry of activity mostly coming from the private capital space as traditional sources become too expensive or dry up amid rising interest rates and choppy markets.
Context: Erik Ryd, who founded the company in 1992, will keep a significant stake in the company and will continue to lead the business.
- He turned Hop Lun into one of the world’s largest designers and makers of intimate apparel. The company has manufacturing operations across China, Bangladesh, Ethiopia and Indonesia.
What’s next: "We are excited to work with Erik to accelerate investments in growing the company, both organically and through strategic M&A, that can expand Hop Lun's production capabilities, customer base and portfolio of owned brands," said Platinum managing director Matthew Louie in a statement.