Operating Partners Are the Future of Private Equity | Jeremiah Wanzell on Consumer Brand Growth

In this episode, Alex Rawlings is joined by Jeremiah Wanzell, a seasoned consumer brand executive with leadership roles at Hugo Boss and Calvin Klein, and now an operating partner working with private equity firms to drive growth in the consumer sector. Jeremiah shares his insights into the evolving role of the operating partner, value creation beyond financial engineering, the importance of omnichannel strategy, and how consumer-focused PE firms can win in a shifting market.

⏱️ Timestamps

00:03 – Intro & Background

• Jeremiah's career journey: from Bloomingdale’s to Hugo Boss & Calvin Klein
• Launching Growth Mindset Advisors to work with PE firms as a fractional growth officer

00:57 – Mistakes Private Equity Firms Make

• Misunderstanding or undervaluing the role of the operating partner
• Value creation needs real operators, not just consultants
• PE firms still testing the waters, especially in the lower/mid-market

03:44 – Why the Operating Partner Model Isn’t Universal Yet

• Too often operating partners are brought in post-acquisition — a critical mistake
• They need to be involved from the outset to shape value creation plans

05:12 – Case Study: Capizio Acquisition

• Deal thesis: investing in niche category leaders
• Brought the deal to Argonne after another firm passed
• Role: pre-deal diligence, channel expansion, post-deal advisory

07:07 – What Deal Teams Miss

• Overlooking multi-channel retail strategy
• Examples: Nike’s failed DTC push vs. Allbirds’ slow wholesale expansion
• Omnichannel is no longer optional

09:32 – Industry Shoutout: Grata

• Sponsor mention for proprietary, data-driven PE deal sourcing

09:58 – State of Consumer Deals

• Deal volume down 15% YoY, but deal size up
• Highlighted mega deals: Skechers ($9B), Dick’s x Foot Locker, Rode Beauty
• Hot sectors: health & wellness, beauty, and digitally native brands

11:27 – Tariffs & Pricing Strategy

• Tariff uncertainty is a headwind but affects all brands equally
• Brands must have clear differentiation and pricing transparency
• Examples: airlines as commoditized vs. a loyal landscaper who passed along cost savings

15:14 – Great Retail Experiences

• Retail “theater” matters more than ever
• Examples: Vuori, Lululemon, building community through in-store events
• It all starts with product excellence

17:32 – Evolution of DTC & Shopify’s Disruption

• Apple iOS14 killed third-party tracking; CAC skyrocketed
• Shopify commoditized eComm site creation → flooded market with undifferentiated brands
• Stubborn brands (e.g. Allbirds) suffered by not adapting

18:59 – Retail Experience Examples

• Retail must build community and be about more than transactions
• Brands that create loyalty through events and authentic connection win

19:51 – What Jeremiah Recommends

• Fan of The Private Equity Podcast and Scott Galloway
• Encourages reading, webinars, and giving back to your network

Raw Selection partners with Private Equity firms and their portfolio companies to secure exceptional executive talent. We focus on de-risking executive recruitment through meticulous search and selection processes, ensuring top-tier performance and long-term success.

🔗 Connect with Alex Rawlings on LinkedIn: https://www.linkedin.com/in/alexrawlings/
🌐 Visit Raw Selection: www.raw-selection.com

Transcript

00:03
Welcome back to the Royal Selection Privates Equity podcast. Joining us today is Jeremy Wansel, an experienced BlueShift consumer brand operator and now an operating partner. Let's dive in. Jeremiah, share with us a brief insight into you, Yeah, thanks, Alan. It's great to be here today. I appreciate the invite. Yeah, so my entire background and experience is squarely in the consumer side of the business.

00:29
I guess you could say I've been classically trained where I started my career straight out of college in the Bloomingdale's executive training program where I was an executive buyer. And then I transitioned over to the wholesale side of the business where I led sales and strategy for globally dominant brands, most notably Hugo Boss and Calvin Klein. And since then I've pivoted my career and started my own consultant practice called Growth Mindset Advisors, where I am a fractional operating partner slash growth officer.

00:57
And I work with private equity firms on deal flow. Perfect. What's one mistake that you see private equity firms or portfolio companies making and what would you suggest to correct them? Yeah, that's a loaded question. I  think, you know, ultimately,  financial engineering, those days are over in private equity for the most part. And I think you're seeing a huge shift of bringing in folks like myself who have true operating experience to drive value creation.

01:27
If you ask 10 different firms what their definition of operating partner is, you'll get 10 different definitions. ah I think that's becoming more commonplace, although it's a relatively unknown um role. ah I just think overall value creation is  desperately needed in private equity.  I think this is a really fascinating topic. I  post regularly about this on LinkedIn.

01:52
My take on the need for this for a of private equity firms, and I don't remember the number, we've done a big mapping process and identified how many firms actually have operating partners and it won't surprise anybody that there's more without them. um But the professionalization of private equity is not being spoken about enough. The competition is rife. The money is incredible in this space and therefore lots and lots of people are piling into it in order to do so. m

02:20
differentiated no longer is capital and  fund size and all these kind of areas. It's basically LPs are interested in, you bring the returns outside of the market growth? And  the deal team doing everything  is over. And, well,  I'm an investment banker X and moved into private equity and I know to grow a business and I've been in consulting for X amount of time and I can do that role.  your consulting role does get played in operating partner, but if you've not

02:49
done the route of consulting operator and then into the operator partner role and you've just come two years consulting and straight into a deal team role, which I know is less likely in America than it is in Europe. But that kind of change for me is important and it's going to be the differentiator for a lot of firms. And if we're seeing the large cap firms that are building out those teams and having those operators, then the low middle market needs to catch up.

03:16
And that's just phase one and that stuff's already gone. The professionalization, marketing teams, in dealer origination teams, et cetera.  why do you think, well, what do you hear? Because obviously you work fractional and work for different businesses that kind of bring you in, obviously ad hoc. What's your take on why the Operating Partner Model hasn't  materialized with every firm clambering over getting people in to drive that value creation?

03:44
That's a great question. I don't know if I have the full answer to it. I think that, especially in the lower to middle market, they're still testing the role. And again, I don't think they fully understand it. And I think oftentimes they bring in operating partners after the acquisition. I think that's a mistake. They should be at the front end of that, working with the deal team, putting together the value creation plan, and just specifically talking to the consumer sector.

04:10
I think it's also uh very important for any operating partner to have an actionable  deal thesis. If you don't bring that to the table, you kind of lose credibility because there's a lot of executives out there that try and make this transition to private equity and quite frankly is completely different world. Like the stakes are high,  but that's why I like it  as opposed to the corporate world. But if you don't have a point of view  on a deal and how you can unlock value and ultimately drive that exit, so what you're talking about

04:39
That's what LPs care about to gain that credibility. You're not going to be effective. So that's the first thing that I bring to a table whenever I engage with any private equity firm. And I work with, know, relatively five firms of varying sizes from independent sponsors to a $200 million fund to a couple billion dollar funds. And obviously, depending on the deal, they'll bring deals to me. I bring deals to them that are appropriate, but you got to have a point of view um and an angle on that deal before you even get to the table.

05:12
So lucky of the role, so you've done, you've worked with a firm, the recent acquisition of Capizio and you play the role as operating partner. As you said, there's lots of different iterations of how businesses use that title and use the people within it. What was your role within that acquisition and kind of walk us through that, what you learned from it, what were the wins, what were the learning points for you? Oh, well, I'll start with the deal thesis. So my deal thesis, I like niche category

05:41
killers is what I call it. So loser brands that dominate in a space and Capizio is the very definition of that. And for those of you that don't know, they're fifth generation family owned business, 137 years in business. And they are either the number one or number two brand in dancewear, depending on the category. So this is like a picture perfect, you know, deal for me. And so the background story is I actually looked at this deal with another firm.

06:10
They ultimately passed, rightfully so, they weren't the right partner. And with their permission, I took this deal to Argonne, um who was not uh on the list at the time for whatever reason,  with the investment bankers. So  it all just kind of fell into place. They were absolutely the right partner. They had the right uh leader.  And so I worked alongside the deal team  on value creation planning,  unlocking channel distribution,  and due diligence. That was my role.

06:39
And now post acquisition, joined the eh advisory board and I'm working with  the VZO team  on channel expansion. Just looking at that, because that for me  is the key area. You said, operating partners should be brought in because of value creation,  not post, pre, because the pre is where the planning is done. The post is where the execution is done. So  what were you...

07:07
I don't want to go into the specifics of the deal because there'll be confidentiality on that, but what are some of the things that you look at and recognize and have seen that maybe not this deal, but other deals where um deal teams have missed, they've not seen the oh simplistic things like customer concentration going to be covered, but from your lens of being a previous operator and working with the likes of Hugo Boss and Calvin Klein or brands everybody would have heard of, what are the things that you see in those deals?

07:37
that the deal team have missed in the past. Yeah. So it comes down to multi-channel uh retail strategy. Let me zoom out for a second. So I'm going give you uh two ends of the spectrum of an example with Nike and Allbirds, right? So Nike, meaning a legacy brand, obvious leader in their space, but they've been hitting some rocky territory lately.  But, you know, three, four five years ago, they doubled down on direct to consumer, right? They wanted to walk away.

08:04
from their wholesale partners,  i.e. DSW, Macy's, etc.  And it totally backfired.  And again, this is part of my deal thesis where you have to have an omnichannel retail strategy. It's no longer  a nice to have, it's a  must have. And those brands that don't execute on each of those channels will ultimately fail. So it's a customer expectation. So whether they're shopping online or in store or in a third party wholesale,

08:32
they expect to have the same experience with your brand. Nike made that tremendous mistake. They now backtrack. Let's use Allbirds.  know, was a direct to consumer darling,  went to a billion dollars valuation. They had all their eggs in a basket of e-commerce. They were very late to the game to expand into wholesale. ah Then they went public and, you know, their stock was less than a dollar. I they rebounded a bit. But again, the point is, is that they didn't move fast enough. They didn't have a balanced approach. So as relates to Capizio,

09:02
What I love about the brand was  that it was multi-channel. Now, when we'll start to look at each channel of business, where can we optimize? Where can we find growth in  the e-commerce channel? How can we right-size other  channels of business, right? Maybe some channels we do need to bring down a bit. So that's where those nuances come into play with an operating partner that a deal team may not know. Sorry to interrupt. Just a quick mention of a long-standing partnership with Grata.

09:32
As you all probably know, the private equity scene is constantly evolving and deal flow is moving now to proprietary and data-driven processes. Grata provides you with the data and information of over 7 million private companies. So if you're looking to improve your proprietary deal flow and improve the data access, then reach out to Grata today. Now back to the podcast. So zooming out from...

09:58
looking at the operating partner role, let's talk about the consumer industry. And I know this is called all sorts of different things and  the deeper you go into consumer, someone gets upset if you call it consumer, but we're just calling the consumer industries, the B2C industry for simplicity. What's your take on what's happening in that landscape from a private equity lens?  In what respect, Alex? Well, what are you seeing, deal trends, what's happening?  Gotcha. Great question.

10:27
I recently read  a KPMG report. um So total consumer deals are nearly down 15 % in Q2 versus last year. But this is distorted. There are some major mega deals um that really distorted the number.  I'll give you three examples. One, there was a $9 billion private deal of Skechers.  There was a $2 billion merger of Dick's Sporting Goods and Foot Locker. There was also a billion dollar acquisition of Haley Bieber's Rode  Beauty Brand.

10:57
know, overall deals are down, but deal size is up, right? So what's really trending right now um in consumer, know, corporate hardbouts, Dockers, example, Levi's sold that off to ABG. There's health and wellness, beauty, and digitally native brands continue to be hot sectors. But for the lower to mid-market, that's where I'm focused. know, consumer deal flow has definitely been slow during the Q2  time period. And this was really driven by the tariff uncertainty.

11:27
Interesting. So, tariffs, nice indication of what we want to talk about next. What's your take? What you see? So, yeah, as far as tariffs, there's no doubt it has created disruption.  And the uncertainty of the White House,  you know, they used a broad stroke approach and kicked the can down the road by contrary. um You know, so I understand what macro rationality is not intended to be a political conversation, but it's tough to mitigate risk.

11:55
you know, with tariff policies changing so  rapidly. But with that said, all brands are in the same boat, right? So this is really a testament to which brands are truly desirable and which are positioned on price alone. And when I see a PE deal who is positioned on price and has no clear differentiation, it's a hard pass for me.  You know, I'll advise uh the private equity firm to just move on.  But strong brands who create best products can surgically raise prices

12:25
and not Nesabit,  but you're not going to fool the customer. You're not going to gouge the customer  and get away with it. So pricing strategy during these uncertain times is incredibly important, um but you have to be transparent with the customer  and brands that literally tell them that we're raising prices and why you actually build trust over time. um But you also have to be willing to lower prices when the macro is improved, but similarly, you're still hitting  your gross margin targets.

12:55
um And  I'll use a couple of examples. So let's use the airline industry as an example. I know 10, 15 years ago, whenever  gas prices surged, airlines started  charging you gas surcharges. They started charging you for baggage fees, right? Because they added weight to the plane. And we didn't have that before. But when gas prices came down, they didn't take away those baggage fees. We're still paying them 10, 15 years later. So I would argue, and this is my opinion, I don't have any data to really support this claim, but

13:25
Airlines are really, they're a commodity now, you know, and most people, myself included, like I shop for my flights based on price. I used to be a frequent flyer.  And there are still some folks that are loyal to frequent flyers, ah miles, but  they've really become a commodity. So they've lost credibility over time. But now I use a middle market example. So my landscaper. So consumer services company,  which is ripe for P roll-ups, just like HVAC companies, that's another hot sector in consumer  services.

13:54
But a few years ago when gas prices went up, uh my landscaper started charging me a gas surcharge  and he was transparent about it. But when gas prices came down, he dropped his prices. So, you know, for me, I appreciated that he gained my loyalty and I still hire him today. So  I look at these tariffs. Yes, it's a headwind, but if you're a strong brand, you can mitigate it  with smart pricing strategy. We've got a UK who's chairman of Ogilvy.

14:23
Rory Sutherland who talks about the airline industry and  my father-in-law works in it as a graphic designer. uh We're talking about it and like share prices, stock prices of that not being particularly good.  We're not seeing things that have a disruption in that. I think what's interesting to him, he said,  there is only the ways to compare on price. You can't compare on if it's a brand new airline,  sorry, a brand new aircraft and you can't search for...

14:51
is it the brand new  X,  F &L, or brand new X from Boeing?  Because that would make it more of an interesting flight and that would value a higher price. But you can't look for these certain things because they don't let you. So therefore, they've actually built an industry that is only based on commoditization  of it's this or it's that. And the hotel industry is basically trading on the basis of it's a brand.

15:14
And he talks about like that kind of cookie fit and I can't, is it the Hilton that did the cookie and it was worn cookie and you got taken to your room and all that kind of stuff.  Um, but yeah, it's interesting that you bring up the airline. reminds me of that. Yep. So walk us through the kind of deal thesis, jumping back into that operating partner mode. Walk us through that. Yeah. So, uh, again, I go back to multi-channel retail  and, uh, really the disruption started.

15:42
around 2020, 21 with uh Apple iOS 14. So they basically changed their  algorithm and no longer allowed brands  access to third party data. So in other words, brands were now flying blind. And what really changed um the D2C landscape, that entire playbook of just throwing money  and ad dollars at Facebook and Instagram, et cetera.

16:10
ah You just weren't getting that return anymore. So your ROAS went through the roof, your customer acquisition costs are now unsustainable. So that was really the tipping point right there. But then also Shopify.  Shopify completely disrupted the industry. 10, 15 years ago with a startup and consumer, whatever uh widget you  chose to uh sell, a good chunk of the money that you would have to raise was for  a development team to create your website.

16:39
Right? Now that's been commoditized. So anyone has a plug and play solution with Shopify and thousands and thousands of brands now flooded the market and everyone's trying to sell an athleisure jogger, right? We don't even have another athleisure jogger.  There's no differentiation there. So um those are the two main points that really just tipped this on its edge.  And the brands that stubbornly like an Allbirds, I'll pick on them again.

17:06
They just waited too long to enter into wholesale or start their own retail brands in a meaningful way. They thought that they could just keep throwing ad dollars and keep getting that return. And that certainly was true for a while. And they had a great heyday from 2012 to 2019. That was an excellent time period for e-commerce brands. But those that were slow to evolve fell by the wayside.

17:32
So again, I'll use the opposite end of that spectrum where legacy brands that were  over distributed and wholesale or their own stores, they were slow to adapt and to really engage customers through e-commerce and D2C  and their tech stacks got way behind and um now they're feeling the pain. So  there are a few brands today that are doing a great job of that.  Viori is the obvious winner in this space.  They've just been a rocket ship.

18:02
But they've done an excellent job of creating great products. They had a great retail experience. They tried to stay as vertical as possible, but they also early  on, um you know, established great third party relationships, i.e. with REI, um to expand brand reach. said, to talk about something, because I think this is every business applicable. You said a great retail experience. Did we just think of that as anything from a peer-to-peer interaction basis?

18:31
What was your take on what they've done well and what other firms have done to coin the term great retail experience?  And I would call it retail theater.  And I'll certainly point uh to Viori is one of them, Lululemon is another. And one thing that those brands do is they invite in the local communities into their stores. So Lululemon has been doing this for years. They're hitting some rocky ground now because so many  MeToo brands are on their heels.

18:59
But their retail experience  was exceptional.  They would have local yoga classes. They would shut down the store, bring people in. It's not just about  sales per square foot that day. It's about community and bringing people together  to really celebrate the brand.  You'll get that ROI later, but be genuine about it  and  create local um communities. I think that is truly important, but always product is king. It always starts with product.

19:29
If don't have great product, if you don't have desire, you're never going to go anywhere. And if you're just trying to knock off other brands and be a me too brand without differentiation, you're not going to go very far. So it's a tricky, tricky balance and there's an art in the science to this business. What do you read, watch, listen to, Jeremiah, that you recommend others check out?

19:51
um I love your podcast, by the way. I am a fan. listen to it often. um Yeah. So uh I also like Scott Galloway. think he's got some great insights out there. um And, you know, I try and read as many books as possible, although with two young kids, that's been a little challenging lately. um But I think ultimately,  you know,  just always network, always genuinely meet people, join as many webinars as you possibly can.

20:18
And always give back freely because it always comes back to you with abundance. If somebody wishes to reach out post this podcast, how best to get in touch with. Yeah. LinkedIn, uh of course, is the easiest way. You can to my website, growthmindsetadvisors.com or send me an email at jeremiah at growthmindsetadvisors.com.  thank you very much for joining us, Jeremiah, and diving into the world of consumer and the world of the operating partner. I appreciate it, Alex. Thanks.

20:48
And thank you very much for everybody for yet again tuning into the Priority podcast. Till the next time, keep smashing it. And thank you very much for listening.