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Inside the Plan for Proenza Schouler

Vanessa Friedman - The New York Times

On Tuesday, part of the Twitter fashion conversation was "What's next for Proenza Schouler?" now that the headline New York Fashion Week brand has sold a minority stake to the private equity firm Castanea Partners and gotten its first establishment chief executive. On Tuesday night, that chief executive, Ronald L. Frasch, decided he would spill a bit on what he had planned.

In short: Handbags, handbags, handbags!

Other stuff, too, but he kept coming back to the handbags. As much as we may keep declaring that the It bag is over, it's still a big thing as a revenue generator.

"The first thing we do need to do is manage expenses better," Mr. Frasch said in a phone call from his office. He noted that his role was supposed to be part time. (He is the "interim C.E.O." with a long-term board seat; Castanea and the other Proenza investors are engaging a search firm to find a permanent chief executive.) But it was pretty clear to him that the commitment would be full time, at least in the immediate future.

"We need to get the handbag business moving again," Mr. Frasch said. "It's slowed down a bit over the last year and a half, and it's our highest margin business, with the greatest opportunity for growing points of sale."

Other than the PS1, Proenza's breakthrough bag introduced in 2008 and iterated ever since, the brand has not really had a handbag hit. (The accessory designer who created the PS1, Darren Spaziani, is now at Louis Vuitton, and Proenza has a new accessories guru — hired from Vuitton.)

What about all those rumors about men's wear and other category expansion?

"They've dabbled in men's leather goods in the past, but whenever anyone starts talking about men's wear, I say I want to talk about handbags," Mr. Frasch said, who also didn't want to talk much about new stores. "It's not an immediate priority," he said.

But merchandising and marketing are.

"There are certain brands, if you say their name, one thing comes to mind," Mr. Frasch said. Hermès? Birkin bag. MaxMara? Coats.

"We don't have that yet, that go-to category that really defines the brand," he continued.

Mr. Frasch said he and the Proenza designers and founders Jack McCollough and Lazaro Hernandez had dinner on Monday night, and they spent the whole meal discussing the subject. "They get it," he said. The three men have known one another for years; Mr. Frasch was a supporter of Proenza Schouler when he was the chief merchant of Saks Fifth Avenue.

(The history may help explain Proenza's decision to sign with Castanea rather than LVMH Moet Hennessy Louis Vuitton. According to someone familiar with the LVMH conversations but who did not want to be identified because of the sensitivity of the topic, part of the issue also was that LVMH and Proenza Schouler were never able to agree on the value of the brand, with the luxury group feeling that Proenza's numbers were simply too high. Mr. Frasch said that the valuation Castanea settled on was on the "higher end.")

Which particular categories were they thinking about?

"Dresses and knitwear," Mr. Frasch said. "At a respectable price, with a Jack and Lazaro twist. When I first saw the pre-collection, I was worried because I didn't think there was enough fashion in there, and customers want fashion from us, but it was there. And we're going to work on shoes. Shoes could be a very important business for us."

All of which is going to take some time, Mr. Frasch acknowledged, which is why the Castanea plan for Proenza involved a seven-year (as opposed to the more common three- to five-year) commitment before Castanea's exit, though he said the group might remain with the brand longer, if necessary.

"As much as we in New York and fashion know the brand, the rest of the world doesn't really know it," Mr. Frasch said. "We have to correct that."

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