MadaLuxe Group just made its first acquisition, marking its entry into the luxury spirits category. Tequila Enemigo is riding the premiumization trend in Tequila, which has morphed from a party drink with its kick disguised in a margarita cocktail to a smooth sipping spirit to be enjoyed neat. Having won five Tequila of the Year awards plus upwards of 60 more, Enemigo is a brand custom-made for that.
Acquired for an undisclosed sum, MadaLuxe is capitalizing on the growing popularity of Tequila that’s propelled it to the second most popular spirit behind only vodka and ahead of American whiskey. The U.S. is by far the world’s leading market for Tequila, accounting for some 60% of sales.
“This is a strategic alliance that makes perfect sense for us, as MadaLuxe Group shares our unwavering commitment to quality and an unforgettable experience,” Tequila Enemigo’s CEO and co-founder Robin Clough said in a statement, adding that MadaLuxe’s distribution network and insider knowledge of the luxury market makes it an ideal partner.
MadaLuxe, which prides itself on being North America’s leading luxury distributor, describes itself as a diversified luxury platform anchored in technology, global reach and luxury expertise.
Platform Business For Luxury’s Future
CEO and co-founder Adam Freede said, “We’re a well-diversified, multifaceted luxury platform with multiple operating divisions spanning categories and territories. As long as it’s luxury, that’s our pillar, our stake in the ground. And in the world of luxury, we are category agnostic.”
A platform business is distinct from the traditional linear business in that it doesn’t own the means of production to push products into the market. Instead, it provides a structure to facilitate interactions and transactions across a number of parties.
A platform business “creates and facilitates the means of connection,” Deloitte explained. Or, as Freede says, MadaLuxe has built a plug-and-play global infrastructure and logistics network for luxury goods distribution.
MadaLuxe partners with the world’s leading luxury brands for the distribution of fashion, including accessories, eyewear and timepieces. Its brand partnerships span Gucci, Cartier, Saint Laurent, Bottega Veneta, Chloe, Alexander McQueen, Versace, Ferragamo, Missoni, Timex Group Luxury Division and more.
Its reach includes 10,000 retailer doors globally. “We are not a cookie-cutter business. We can work in a multitude of ways with luxury brands, depending on what they want to accomplish,” he continued. “That’s our big advantage; we’re nimble.”
It ventured into home luxury by partnering with Hästens to open 20 stores across the U.S. With its acquisition of Enemigo, it’s entering a new category and going deeper into the luxury business.
A Business Model Built For Scale
While hesitant to use the term conglomerate to describe the path MadaLuxe is taking with the acquisition, it has a venture capital arm that provides early-stage funding to promising businesses, giving it access to promising new luxury ventures, like Reflaunt in circular fashion and tech platforms, including Psykhe AI and Codeboxx.
“Speaking with humility and respect, it would not be far off to say that we’re emulating some of the smart moves we’ve seen out there,” he said. “We’ve hit a critical mass and have enough strength on our balance sheet and talent inside to stretch. So we’re working on a few other exciting things that will continue this exact concept of continued diversification in more categories and more territories.”
And he is proud to say the company has never taken any outside investments. Its growth has been bootstrapped with his mother and co-founder Sandy Sholl inspiring his and the company’s success. The “Mada” in MadaLuxe is Adam spelled backward.
Powered By Relationships
Retail industry luminary Robin Lewis calls this the “distribution century,” which marks the “collapse of the traditional wholesale/retail business model.” He calls on retailers to expand their narrowly defined linear business model to an expansive distribution platform model, like the one that MadaLuxe has built.
But rather than having to go back and remake an outmoded model into a new one, an often treacherous course, MadaLuxe has built it from the ground up and now can attach new businesses and brands to it, like Hästens and Enemigo.
It’s a business model designed for the future with connections and relationships the ties that bind partners in the distribution century.
“Our three guiding pillars are our supply, meaning our relationships, the breadth of our distribution and the diversification of our business,” Freede concluded.
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