Paul Stuart is about to change hands.
The venerable menswear retailer is expected to sign a deal Monday to be sold to Middle West Partners, a Boston-based private equity firm, in partnership with Peerless Clothing, WWD has learned. The deal will be for the U.S. business, which has been owned since 2012 by Tokyo-based Mitsui & Co. Ltd. The larger Japanese business will continue to be operated by Sanyo, which purchased the rights from Mitsui in 2021.
Terms of the sale to Middle West were not disclosed.
As a result of the sale, chief executive officer Trevor Shimpfky and creative director Ralph Auriemma will be leaving the company. Shimpfky declined to comment on the sale or his plans.
In an exclusive interview, Kevin Kelleher, cofounder of Middle West, confirmed that his firm was acquiring the retailer, which operates a flagship on Madison Avenue in New York as well as branch stores in Chicago, Washington, D.C., and Southampton, N.Y.
“We couldn’t be more excited,” he said, calling it a “pinch-me moment.” Kelleher said his partners in Middle West, Peter Hamp and Michael Hamp, have been longtime customers of Paul Stuart and he has recently discovered the company as well. “Peter and Michael have been amazing clients of Paul Stuart for decades,” he said, calling the purchase “a marriage of business and passion.”
Middle West keeps a very low profile. In fact, the company’s website doesn’t even list the brands it owns or invests in. But in April, the firm came out of the shadows when it purchased David Webb, a heritage jewelry brand.
Kelleher said adding Paul Stuart to its stable is indicative of Middle West’s propensity to acquire heritage American brands. “Paul Stuart is such an iconic piece of American luxury landscape, so it’s hard to believe we’re getting this lucky twice,” he said.
Like it did when it acquired David Webb, Middle West is changing the management team and will be bringing John Hutchison, the former CEO of Bonobos, on board to run the business. Hutchison, whose background includes The North Face and Nike, declined to be interviewed since he has not yet started at Paul Stuart.
Jazz singer Peter Cincotti in a Paul Stuart suit.
Sean Munro
There are no immediate plans to replace Auriemma, Kelleher said, but Middle West will work with the existing design team on the product. That’s where Peerless comes in.
The Canadian manufacturer, which is the industry’s largest tailored clothing producer, will help manage the merchandise at Paul Stuart, Kelleher said. For the foreseeable future, Samuelsohn, another large Canadian clothing producer that has long manufactured Paul Stuart’s suits and sport coats, will continue in that role. “We have no plans to alter, or put at risk the quality of the Paul Stuart product,” Kelleher said.
While neither the terms nor the size of Peerless’ investment were disclosed, Kelleher said that this will allow the manufacturer to further explore the higher end of the market. Peerless holds the tailored clothing licenses for everyone from Tommy Hilfiger and Kenneth Cole to Calvin Klein, DKNY, Hart Schaffner Marx and a slew of others.
“We couldn’t feel more fortunate to have Peerless as a co-investor,” Kelleher said.
Peerless executives declined to comment on this deal, deferring to Middle West, which it said is leading the acquisition.
Kelleher stressed that although the top management at Paul Stuart will be different going forward, Middle West has the utmost respect for the team at Paul Stuart and sees significant opportunity to expand the company’s reach. “There’s so much potential,” he said.
He said his company’s first priority is to “invest in the existing team” as well as the stores. Eventually the plan is to expand the Paul Stuart footprint to additional markets in the U.S., such as Dallas or other key cities.
He stressed that Middle West isn’t in a big hurry to open stores. “Mitsui did a wonderful job [managing the business], so we’re not going to force growth.”
Paul Stuart was founded in 1938 by Ralph Ostrove and his cousin Norman, who named the store after Ralph Ostrove’s son, Paul. For nearly 60 years the store was run by Clifford Grodd, who had married Ralph Ostrove’s daughter Barbara, along with Paul Ostrove. Paul Ostrove died in 2004 and Grodd in 2010.
Under Grodd’s tutelage, Paul Stuart became known for its soft-shoulder look in tailoring and is believed to have been the first American retailer to bring side vents to the States, as well as the three-button suit. All of the merchandise at Paul Stuart bears the retailer’s name.
Today, in addition to its U.S. stores, Paul Stuart operates some 80 shops-in-shop and close to 500 corners in Japan, which will continue to operate under Sanyo.
A reimagining of Paul Stuart’s Man on the Fence logo.
Courtesy Photo
Mitsui’s relationship with Paul Stuart dates to 1975 when it began to import the retailer’s private-label merchandise into the Japanese market. In 1991, the relationship was expanded and Mitsui was granted an exclusive license to produce and sell Paul Stuart product in Japan. It purchased the U.S. business from the remaining family members 13 years ago.
Middle West was created three years ago, Kelleher said, with a “handful of long, patient investors.” It focuses on consumer goods, sports and entertainment companies. In addition to David Webb, Middle West invested in Motor City Golf Club, the seventh team created by TGL, a primetime, team-based golf league founded by Tiger Woods and Rory McIlroy’s Tmrw Sports in partnership with the PGA Tour. The Hamp family is a longtime co-owner of the Detroit Lions, with Sheila Hamp currently serving as principal owner and chairwoman.
