La Perla Owner Bets on Ralph & Russo with Minority Stake

LONDON, United Kingdom — Lars Windhorst already owns one unprofitable luxury fashion brand. Now he's getting involved in another.

The German entrepreneur’s Tennor Holding took a minority stake in UK fashion house Ralph & Russo, with an option to increase its holding up to 40 percent worth $50 million, according to a statement on Wednesday. Officials for Tennor and Ralph & Russo declined to elaborate on the initial investment.

The label made famous by Meghan Markle lost £2.5 million ($3.1 million) on £14.3 million of sales in 2017, according to public filings. Tennor bought Italian lingerie chain La Perla in 2018 after that company lost €110 million ($124 million) on €134 million of sales, and last month announced a €125 million deal to buy a stake in Berlin's leading soccer club.

Windhorst, 42, has continued to make deals even as one of his biggest investors suffered €8 billion of redemptions since June 20. H2O Asset Management was questioned by analysts last month for the scale of its investments in notes tied to Tennor companies focused on farming to advertising.

Along with designing the £56,000 couture dress Markle wore for her official engagement picture, Ralph & Russo sells £20,000 alligator-skin handbags and £2,000 shoes. The company, founded in 2006 by Australians Tamara Ralph and Michael Russo, is six months late filing accounts for 2018. That's a deliberate delay to arrange Tennor's investment, a spokeswoman said.

“There’s a lot of investment needed to get it to the point where it’s lucrative,” said John Caudwell, a minority shareholder of Ralph & Russo through his venture-capital firm JDC Investments. “If you took it on trading performance now, it wouldn’t be worth much, but if you valued it on strength of brand there is value.” Caudwell, who became a billionaire in 2006 after selling Phones4U, said he’s not involved with Windhorst’s investment.

By Thomas Beardsworth and Luca Casiraghi; editors: Vivianne Rodrigues and Abigail Moses.