Most Recent Articles In Financial
Latest Financial Articles
- Onward Profits Inch Up
- Europe’s Markets Lose Ground Ahead of Greek Referendum
- Joe’s Receives Forbearance From Creditors
More Articles By
PARIS — LVMH Moët Hennessy Louis Vuitton is no longer going for baroque.
Christian Lacroix confirmed Friday that Bernard Arnault, who launched the designer to stardom by setting up a couture house just for him in 1987, is in talks to off-load it to Falic Group, the Florida-based travel retail firm.
Simon Falic, chairman of the Florida-based Falic, stated, “We are in final negotiations to acquire the entire brand.”
The designer himself, meanwhile, said that, while he is not party to LVMH’s negotiations, he is hardly opposed to having new owners as he has been increasingly vocal about lackluster development at his fashion house.
“I’m still very confident in the future, with these people or whoever else,” Lacroix said Friday. “Before that, I want to finish my couture collection [to be shown on Jan. 25] because it’s my best answer.”
LVMH declined comment on any deal, but Falic said the company met with the workers’ association at Lacroix last week. He added that “we would continue to respect all licensing agreements,” meaning that the group would work with the Paris-based Inter Parfums, which has developed the Lacroix fragrances. He declined to say what purchase price is being discussed.
Miami-based Falic Group is best known for its Duty Free Americas chain of 90 duty-free, news and gift stores in U.S. airports and along the U.S. borders with Canada and Mexico. Judith Leiber recently partnered with Falic to expand its business into Central and South America.
Lacroix fits the travel retail operator’s strategy of acquiring high-end brands, Falic noted, adding that this would be the third beauty brand acquired by the group. Previous acquisitions include the Hard Candy and Urban Decay cosmetics lines. Those two California-based upstart indy brands also were acquired from LVMH in December 2003.
It is believed that Falic — described as a huge fan of the designer’s elaborate and eccentric designs — would maintain Lacroix’s money-losing, but critically acclaimed, couture business — and his design services.
It also is understood that Lacroix would continue to work for LVMH as ready-to-wear designer for Emilio Pucci. He joined Pucci in 2002 and, while his contract there is said to be up for renewal later this year, he has given the label fresh buzz and currency.
Lacroix characterized his work at Pucci as giving him “a second breath.”
This would not be the first time LVMH has had dealings with Falic. In December 2002, the French luxury giant sold the Hard Candy and Urban Decay brands to the Florida company as part of an ongoing effort to exit noncore businesses and concentrate on sure-fire brands such as Louis Vuitton, Hennessy and Dom Perignon.
In 2003, LVMH unloaded the beauty firm BlissWorld; the watch firm Ebel; fragrance licenses for Michael Kors, Marc Jacobs and Kenneth Cole, plus the cognac brand Hine, champagne maker Canard-Duchene and the auction house Tajan.
Often those brands went for a song: $1 million for Hard Candy and Urban Decay, and 40 million euros, or $54 million at current exchange, for Ebel.
Lacroix declined to comment on the asking price; however, analysts pegged it in the range of 30 million to 60 million euros, or $40.5 million to $81 million, roughly one to two times sales.
Should a deal be reached, Lacroix might not be the last of LVMH’s brands to go. Thomas Pink, which the French luxury group bought in 1999, has been on the block for some time, and sources suggested Arnault might be willing to part with Givenchy, Kenzo, Guerlain or Donna Karan — if the price is right. Arnault also has described DFS and Sephora as “noncore.”
The prospect of Lacroix changing hands sent shock waves through the industry Friday and will surely bring a frisson of tension to couture week here later this month.
Business titan Arnault plucked Lacroix from Jean Patou and nurtured his fashion plum through critical highs and financial lows, including annual losses believed to total as much as $10 million a year and the colossal flop that was the first Lacroix fragrance, C’est la Vie.
Still, the designer was in good spirits on Friday.
“I am very confident, very serene. I am very open-minded, and why not [sell Lacroix] if they [LVMH] don’t know how to manage the future of the house?” Lacroix said in an interview. “I want to find the right formula, the right everything for the house of Lacroix.”
In an interview last March, Lacroix blasted LVMH for its one-size-fits-all approach to the fashion business, a lack of funding and for misuse of his name.
“We cannot fight without the same weapons. Lacroix success is based on individuality. We have to find new strategies,” he said.
At the time, Lacroix also complained about having to forego the ready-to-wear runway for three seasons because of financial constraints and expressed embarrassment that LVMH, without his consent, lent his name for Schwarzkopf home hair coloring in “couture” shades.
“I’m not against success made without me,” he said last year. “But I’m sorry — we have to focus on one image, which is mine. I’m interested in designing a fragrance bottle for my next perfume.”
Beloved by press and clients, the 54-year-old Lacroix is famous for lavish ornamentation, romantic silhouettes and a lusty, Mediterranean attitude that draws inspiration from his native south of France.
And even though the designer’s usually high spirits were said to plummet each time he arrived at chez Lacroix the past year, he continued to deliver superb couture collections, some of the most lauded of his career. His rtw collections also have received positive reviews in recent seasons.
However, Lacroix’s rich vision has not been easy to translate into commercial success and it is believed the house has yet to generate profits.
Lacroix said he remains convinced such business success is possible, citing strong sales of his signature, Bazar, jeans and men’s wear lines during the holiday period.
Lacroix has contracted his services to LVMH since 1999 via his design firm, XCLX, whose client list spans opera companies, France’s high-speed train operator and a Paris hotelier, which, last week, opened the first of four Lacroix-designed inns.
— With contributions from Pete Born, New York