NBA owners David Blitzer and Gabe Plotkin, along with former football star Tim Tebow, have joined forces with other investors to make a significant investment in men’s apparel brand Rhone. The group of investors acquired a 29% stake in Rhone from private equity firm L Catterton in a transaction that was finalized in July 2022. The exact terms of the deal have not been disclosed.

Both Blitzer and Plotkin, who have extensive experience in professional sports ownership, were drawn to Rhone’s potential. Plotkin, who recently led a group that purchased Michael Jordan’s majority stake in the Charlotte Hornets, supported Rhone through his family office, Tallwoods Capital. Blitzer, on the other hand, is recognized for co-owning the NBA’s Philadelphia 76ers and the NHL’s New Jersey Devils.

Rhone, which was established in 2014, specializes in workout and casual wear and has been consistently profitable for the past three years. The brand has experienced remarkable growth, with annual revenue surpassing $100 million, largely driven by the expansion of its store network. If Rhone were to go public, it is estimated that the brand could be valued at over $500 million, although CEO Nate Checketts has made it clear that there are currently no immediate plans for an initial public offering (IPO).

Checketts revealed that he began exploring options for Rhone after receiving interest from private equity firms and special purpose acquisition companies. However, concerns about the macroeconomic landscape and the stability of the IPO market caused him to hesitate. Seeking guidance, Checketts sought advice from Brian Rolapp, the NFL’s chief media and business officer, who suggested that he consider running the business independently.

Motivated by Rolapp’s counsel, Checketts approached Tracy Farr, an investment banker from Lazard, to explore the possibility of buying out L Catterton’s stake. The proposal garnered overwhelming interest and commitments from potential investors, which ultimately convinced L Catterton executives to agree to the deal.

In addition to the notable investors already mentioned, other prominent parties, such as the late former Utah Jazz owner Larry H. Miller’s family office (LHM), as well as institutions like Cypress Ascendant, Kaulig Capital, and Sweetwater Private Equity, also participated in the investment. Furthermore, retired NFL players Tim Tebow, Steve Young, Troy Aikman, and Justin Tuck have all shown their confidence in Rhone by investing in the brand.

While private equity firms and SPACs have shown interest in Rhone in the past, Checketts shared an interesting anecdote about how retail giant Gap approached him in 2016 to discuss a potential deal, with the intention of merging Rhone with its activewear brand Athleta. However, the deal never came to fruition. Instead, Gap decided to launch a similar brand called Hill City, which Checketts believes closely imitated Rhone’s products and marketing strategies. As a response, Rhone acquired domain names related to Hill City and redirected them to their own website. Gap eventually shut down Hill City in 2020.

With the support of their new investors, Rhone is determined to further expand and grow their brand. Plotkin expressed his excitement about the future of Rhone and his strong belief in the brand’s products. The involvement of industry veterans and sports figures in this investment showcases the potential and promise that Rhone holds in the competitive menswear market.

Useful links:
1. Rhone Official Website
2. Rhone LinkedIn Page