I was on book leave, in March 2023, when the news broke that Khaite, the New York-based fashion label designed by Catherine Holstein, with backing from a Pritzker and a Traina husband, had received a growth equity investment from Stripes, the firm founded by Ken Fox in 2008. While every investor has a type, Stripes’ consumer portfolio includes the outrageous Californian food emporium Erewhon (where you can buy $40 colostrum ice cream), zeitgeisty film studio A24, On (the Swiss running shoe with soles that look like teeth), Kosas (sporty-and-rich makeup), Levain (decadent cookies for decadent people who are on Ozempic), and Reformation (fastish fashion with a conscience).
These are all premium brands that appeal to a certain set of people very into the idea of a certain kind of progressive, if still consumerist, lifestyle. Khaite, a high-end fashion line known for its cool jeans, chunky knits, and wispy gowns, made perfect sense in the portfolio. The woman who wears Khaite probably also wears Reformation dresses (or buys them for her niece), and uses Kosas’ brick-red lipstick, and says that her favorite film of the past decade is Everything Everywhere All at Once (or Uncut Gems).
Still, there was one piece of the story that mystified me. Investment firms like Stripes rarely take bets on high-end fashion anymore, especially New York upstarts that struggle to compete against the European conglomerates. Around the time the Stripes deal was announced, a market source, as we call them, shot me a text: “Do you know how much they paid for Khaite?” This person knew a strategic buyer who was interested in acquiring the company, but felt that the rumored $1 billion valuation was too high for an outfit projected to generate $100 million in revenue this year. I said I’d look into it.