Mitchells, Marios of Portland Form Joint Venture
Two of the most respected names in luxury specialty store retailing in the U.S. are joining forces. The Mitchell Family of Stores has created a venture with Marios of the Pacific Northwest — a partnership that will bring the Mitchells’ systems and e-commerce expertise to Mario Bisio’s stores in Portland, Ore., and Seattle while giving Mitchells a further foothold on the West Coast.
“This is different than any other deal we’ve done,” said Bob Mitchell, co-chief executive officer of Mitchells. “Mario and his executive team will continue to run the company.”
He declined to be more specific about the financial details of the deal, but said this is “not a short-term situation” and the Mitchells are prepared to “invest heavily to continue to grow” the combined company.
“This is not an exit strategy for me,” Bisio stressed. “In fact, it’s a long-term commitment to me, and combined, we’ll have more capital and power in the market. It allows our long-range plans to come to fruition on a faster timeline and protects our brand.”
The Westport, Conn.-based Mitchell family, whose specialty store business has estimated sales of around $140 million, has slowly been expanding its reach. The business was founded by Ed and Norma Mitchell in 1958 and it is now run by their sons and grandchildren. The retailer’s first acquisition came in 1995 when it bought Richards in nearby Greenwich, Conn. Ten years later, it bought Marshs in Huntington, N.Y. In 2009, the Mitchells made their first foray onto the West Coast when they inked an 11th-hour deal to acquire the assets of San Francisco-based Wilkes Bashford out of bankruptcy for $4.6 million in cash.
Since these acquisitions, Mitchells has continued to increase its volume and buying power within the upscale market. The company has also added women’s wear to those stores.
Marios’ story is very similar.
The business was founded in 1960 by Mario Bisio Sr., who opened a family clothing store in Portland. Mario Jr. started working at the store during high school and became a full business partner in 1973. He expanded to Seattle in 1982 and added women’s wear in 1994. In 2006, Marios 3.10 opened in Portland, catering to a more casual lifestyle. Industry sources estimate the volume at around $30 million.
The Mitchells and Bisios have been friends for decades. The two are part of the Forum Group, a group of non-competing specialty stores who exchange details about their businesses.
“This is about making Marios better,” Bisio said. “By working with long-term friends that I trust completely, I can share my dreams and concepts to push my retail concept to new levels.”
“It’s an opportunity to leverage each other’s strengths,” Mitchell added. “We’re growing, but we want to continue to grow as fast and prudently as possible.”
Allan Ellinger, senior managing partner of MMG Advisors, who worked with Bisio on creating the venture, said the deal “marries the two best fashion retailers in America. Culturally, they’re very similar and the way they think is in perfect alignment.”
He said the partnership gives Bisio “a real strategic opportunity to take advantage of the systems and financial strength of the Mitchells. And for the Mitchells, it’s a long-term opportunity to partner with one of the great retailers in the Pacific Northwest with a great following.”
Mitchell said his company will offer expertise in “e-commerce, systems and clientele” to Marios stores. And while Bisio would have eventually invested in these things himself, as a sole operator, it would have taken much longer.
The name on the stores will remain the same and the executive team will also remain intact. That includes Lynwood Holmberg, fashion director; Simon Chan, senior men’s buyer, and Patsy Carlson, chief operating officer, the retailers said.
Chris Mitchell, Bob’s cousin, who oversees Marshs, will spend one week a month at Marios as integration officer, “blending both worlds,” Bob Mitchell said.
Bisio said he has “long envied” the Mitchells systems and is eager to have it implemented at his stores as well. “And it gives us an immediate e-commerce solution. With e-commerce, scale is a very important piece.”
He said that by integrating into the Mitchells systems, the Marios customers will now have access to five times the inventory that is available. While there are differences, both businesses carry similar brands, including Brunello Cucinelli, Ermenegildo Zegna, Hugo Boss and Canali. Women’s wear represents 52 percent of the mix at Marios and 55 percent at Mitchells Family of Stores.
“The pillars of the business are very similar,” Bisio said. “And the crossover and synergies are overwhelming.”
Specifically, Mitchell said he sees further opportunity to expand Marios’ women’s jewelry business and its made-to-measure men’s business. “We will invest in those to increase the growth rate,” he said.
The partnership also gives Bisio the peace of mind that his business will be in good hands when and if he chooses to retire down the road. He has a daughter in the business who works for Brunello Cucinelli who he hopes will eventually join the business, but she’s not ready to join the fold now.
Does this deal mean the Mitchells are open to taking on bringing other luxury specialty stores into their fold? “We’ve never been ones to rush and we’re going to renovate our two Connecticut stores next year,” Mitchell said, so that project and the integration of Marios are currently enough.