Ginger & Smart's future uncertain after private equity fire sale

Alquemie Group has also sold the remaining assets of SurfStitch, online surf and skate wear retailer that soared to a $500 million valuation a decade ago, to the same undisclosed buyer that purchased Ginger

Alquemie Group has sold the remaining assets of SurfStitch and Ginger & Smart to the same undisclosed buyer that purchased the first batch of assets in December, the private equity firm said on Monday.

The seller of the assets is Alquemie Group, which acquired the brands out of administration in 2020.

The buyer, who is an Australian private equity firm, bought a majority stake in both brands in December.

At the time, Alquemie said it would continue to manage both brands and sell remaining assets to the private equity firm.

Alquemie is selling the remaining assets of SurfStitch and Ginger & Smart for a total of $100 million, the PE firm said.

The sale price is significantly lower than the valuations that both brands commanded at their peak.

SurfStitch was valued at $500 million a decade ago, while Ginger & Smart reached a $1 billion valuation in 2015.

Both brands have struggled in recent years and both brands went into administration in 2020.

Alquemie bought both brands out of administration and has been trying to sell them since.

The sale of the remaining assets of SurfStitch and Ginger & Smart is expected to be completed in the first quarter of 2024.

The buyer is planning to merge both brands and create a multi-brand fashion platform.

The move comes as private equity firms are increasingly investing in the consumer sector.

Firms such as KKR & Co and Bain Capital have been deploying large sums of money in recent years to buy up companies in sectors such as retail, food and consumer packaged goods.

Many of these firms are now looking for an exit from their investments, and they are selling their stakes in consumer companies at huge premiums, sources familiar with the matter have said.