When I stepped off the elevators at the 7th Avenue and 40th Street offices of MMG Advisors, I was immediately struck by the warm hues of aged maple wood paneled walls. The feeling is comforting, tasteful, and classic. A sense of solid tradition is palpable. Soon, a pleasant smile followed by a cordial “hello” start the human side of the experience. With the whir of a sliding stainless steel framed door sliding back to beckon me inwards, it’s clear that this company isn’t content to rest simply on tradition. MMG is a company that is solidly grounded in tradition, yet keenly focused on the future for its clients. These small cues are subtle, but no doubt purposeful.
Since founding MMG Advisors in 1989, Allan Ellinger has been a stalwart fixture on the 7th Avenue fiscal landscape ever since. To be exact, 40th Street and 7th Avenue. “I’ve not been off of 40th Street since 1987,” states Ellinger with pride. Since setting out on his own in a small office in 111 West 40th Street loaned to him by his good friend Arnold Cohen, he’s never left the block. “This block is my home,” he says. “We chose this address with our clients in mind.”
Now, in its 35th year of operation, what started out as a turnaround and restructuring company has transitioned into one of the fashion industry’s premier mergers and acquisition firms, specializing in “fashion-oriented consumer products, home, footwear, jewelry, accessories, and other relevant consumer products, including toys, healthcare, beauty, and even a franchise or two.” Under the leadership of three partners, Allan Ellinger, Andy Postal, and Mary Ann Domuracki, MMG Advisors has orchestrated some of the most talked about M&A transactions in our industry. Their list of clients over the last 35 years reads like a fashion directory and includes labels that fill every closet in America.
Each of their successful deals is immortalized with a statuette, aka: “tombstones” in industry lingo, that can be found in the firm’s conference room and literally every corner of the offices throughout. Ellinger looks upon every tombstone like they are each a valued member of his family. This level of personal affinity for the firm’s deals is a hallmark of an MMG partnership. “We’re very focused on the cultural alignment of our deals,” says Ellinger. “We have to be very careful who we propose our clients partner with and who we bring to the table. We never have an agenda of our own. There isn’t a check large enough to have us compromise our integrity.”
How MMG judges the cultural alignment speaks to the secret sauce of the firm’s success over the last 3 ½ decades. Each partner has extensive experience in the operational trenches of the fashion business. Ellinger got his start in menswear, with Pierre Cardin, Alan Flusser, and later BASCO. He led all three companies through numerous ups and downs, exiting each in very interesting ways, which offered experiences that would serve him incredibly well in his future endeavors. Allan calls these experiences the “building blocks or foundation” of where he is today. One of Allan’s “Ellingerisms” to this day is “the first thing to learn is who to learn from.”
Andy Postal began his career in Washington, DC where he served on the staff of what is known as the Church Committee under the Senate Intelligence Committee, specializing in Constitutional Litigation. From there, he joined the law firm of Cravath, Swaine & Moore, specializing in commercial litigation and M&A cases. He then took over his family’s blouse business for 17 years, before selling it to a Hong Kong Chinese based concern, where he remained for the next 3 years to manage the transition. “After leaving there, I had to get into a profession, or buy a business. I landed at MMG in 1999,” reminisces Postal.
The most recent partner to join the firm in 2015, Mary Ann Domuracki, was deeply involved in the accounting and finance sides of the business prior. “I had known Allan for over 20 years and always admired the way he managed the firm and how he positioned MMG in the market. What stood out for me when joining was the fact that Allan and Andy had operated companies before getting involved in the finance side of the industry.”
This culture of a relationship-based business is one that has served MMG well. All three partners were quick to point out that their business is 100% referral based. Each asserts that their individual pasts in actually running the sort of businesses they now seek to sell or buy on their clients’ behalf is the number one reason MMG has been so successful in such a fiercely competitive space. Domuracki, ever the one to be succinct, states, “The partners each believe in relationships first. Out of those relationships come continued referrals.”
Ellinger articulates it very simply, a skill that he possesses ad infinitum, “When we first meet with a company, the principles we are meeting with immediately recognize that we can speak their language. We understand the lingo and innuendos of the business from all sides.” Postal agrees, adding, “The MMG value proposition is that we know the operational aspects of running a fashion business, so we can identify issues in a fraction of the time our competitors can.”
The MMG approach is markedly different than others in the space. Ellinger makes it clear that “our only agenda is that which is in our client’s best interest.” He goes on, “This is a very personal business. We need to build trust between our clients and ourselves to that they trust us and our judgement. They’re going to be looking at the world through our eyes as a deal progresses. Our job at all times is to protect our clients’ best interests. We do a lot of hand holding around here.” Once the two sides agree to move forward, the objective is to put a deal together that will achieve the desired goals of selling or acquiring a business in as expedient a manner as possible so that the business being sold is not disrupted.
While a typical deal once took 5 to 8 months, that timeline has extended to 7 to 10 months in today’s economy. Regardless of the type of deal that is being sought, whether it’s a strategic acquisition to increase market share, Ellinger’s favorite type of deal, or a financially motivated sale, the goal remains the same – “to put together deals that last a long time. It’s our form of sustainability,” quips Ellinger. He continues, “All successful deals have a key requirement of having a clearly stated post-closing integration plan.” MMG remains involved only to make sure that the deal continues post-closing as it was intended to from the start. “More deals fail because of poor integration than for any other reason,” Ellinger concludes.
Only a short time ago, MMG managed to put together a deal of its own that left more than many 7th Avenue executives intrigued with the possibilities. 53 year veteran of the factoring business, and most recently the President of the CIT Factoring Group, Marc Heller, joined MMG in a senior advisory capacity. Heller referred one of the first deals Ellinger was able to close when MMG began 35 years ago and has sat across the table from MMG on countless deals since. Heller sees his role at MMG as providing more of a 35,000 feet perspective of the industry. “I have built many meaningful client relationships in my career, and I’m still a ‘go-to’ for many of them for many reasons,” says Heller. “I meet with many former clients to inquire about acquiring companies, or selling their businesses if they are in the exit strategy thought mode. From where I sit, I can provide valuable knowledge to all involved parties as to what’s going on in the market at large.”
Postal agrees, stating, “We’ve been fortunate in that we’ve built a great team at the firm, and we are thrilled that Marc has joined us and brought us to a national scope.”
While Ellinger and Heller crossed paths more times than they can count during their business pursuits, they both emotionally recount one of their greatest accomplishments being the formation of Fashion Delivers, now known as Delivering Good, after its merger with K.I.D.S. (Kids in Distressed Situations) just over a decade ago. Delivering Good provides new product to those in need as result of natural disaster, poverty, incarceration, or domestic abuse. To date, the organization has donated over $3 billion in new product to those most in need the world over.
When asked about Ellinger’s contributions to the mission, Matthew Fasciano, the President and CEO of Delivering Good, said “MMG Advisors has been an unwavering supporter of Delivering Good. Contributing to society and giving back are core values for MMG Advisors, values that Delivering Good embodies as well. Allan Ellinger, our co-founder and board member, and his team have championed our mission to provide people impacted by poverty and tragedy with new merchandise. Their support makes a meaningful impact, offering hope, dignity, and self-esteem to at-risk children, families, and individuals. Their commitment to social responsibility has significantly extended our reach and impact. Congratulations to MMG Advisors on this 35-year milestone, and thank you for being such an essential part of our journey.”
Mary Ann Domuracki adds, “our firm regularly gives back to the industry we serve. We don’t just donate to the charities we support, like Delivering Good. We are also active in the American Apparel & Footwear Association (AAFA), the Footwear Distributor’s Association, and the Accessories Council. We are active leaders of many of the events in which we are involved.”
It’s clear that all the partners at MMG Advisors each feel a deep sense of responsibility towards all of those they serve. This commitment to clients and society has served them well in the past and position the firm to be an ever growing service provider in the markets of tomorrow. It’s also an obligation that they don’t take lightly. “Representing an entrepreneur or a private business is an awesome responsibility,” say Allan Ellinger. He continues, “because we are being entrusted by the owner to convert what is probably their largest asset from an operational entity into cash that more often than not, is intended to support the current and several other generations to come.” Mary Ann Domuracki is a bit more direct in her conclusions. “We all like to add value to our client’s needs,” she says.
Perhaps Andy Postal sums the last 35 years of MMG Advisors’ experience up in the most forward facing fashion of all – “We’re better at what we do now than we’ve ever been. I think the company is well positioned for the future.”
As my visit concluded, Ellinger walked me to the elevator, which, as he explained, he does with every visitor. I couldn’t help but feel as if I were part of the family. This small, but meaningful gesture was the perfect and fitting end to our meeting, and further evidence that no detail is left to chance at MMG. I think Andy Postal is right…this company is well positioned indeed, and the future is a bright one.
