Rejuvenated Liberty of London Readies a Fresh Pitch for Strategic Investors

(MoneyWatch)  Fresh prints, lightweight fabrics, and sunny colors usher in the arrival of spring in the fashion industry. But for Liberty of London, the venerable British retailer best known for its textile designs, such sartorial stuff signifies the company's return to relevance in the U.S. -- and its position in the eye of potential strategic investors. Liberty's whimsical florals and colorful patterns charmed Anglophiles stateside for over a century. Recently though, the company that was founded in 1875 fell out of favor with younger consumers who equated its Art Nouveau-inspired designs with museum relics rather than wearable art.

A partnership between Liberty and Target (TGT) changed all that in a day -- literally. The collection, which marks the first multi-channel designer collaboration for the Minneapolis-based retailer, sold out in a New York minute at a special pop-up shop located near Bryant Park (former home of NYC Fashion Week). Even Target could not forsee the demand for Liberty goods which include color-splashed rubber boots, baby clothes, gardening tools and of course, dresses, blouses and bathing suits, and had to close the shop earlier than expected. All this on the heels of the equally irresistible cosmetics collaboration with MAC that features limited edition makeup colors in glossy white cases adorned with exclusive Liberty prints.

The timing couldn't be better. The company just announced a deal to sell and lease back its London department store, a move that should raise ?£41.5 million to help pay down the group's debts and provide additional financial resources. But the demand also makes the company that much more attractive to investors who have been sniffing around since last summer. Liberty's CEO, Geoffroy de La Bourdonnaye, said the company was considering taking on majority or minority investors to fuel growth.

What the company does not want to do is sell the business off in sections. Majority owner MWB Group Holdings has made a concerted effort over the last two years to dust off the cabbage roses and reposition Liberty as a global luxury brand across four distinct business activities. Liberty's textile business has always been the company's bread and butter, staying in the black with licenses to Nike, Balmain, and Junya Watanabe, part of Comme des Garcons. MWB's effort most notably encouraged a "Renaissance of Liberty" in the retail sector. The bricks-and-clicks strategy has paid off thus far for MWB with Liberty stock trending up and double-digit revenue growth since 2008.

Because of MWB's investments in the hospitality industry, the company is currently battling high debt and weak demand for hotel rooms, making bids from such players Marco Capello, the former boss of Merrill Lynch's private equity division, and others such as Robert Bensoussan, the former chief executive of Jimmy Choo and founder of Sirius Equity, and Li & Fung, the Hong Kong- based retail supplier all the more attractive. One hopes that whoever does take the day won't want to fix what isn't broken -- the fabrics -- just now having another moment in the sun.