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It looks like Coach Inc. is casting a wide net to find the brand’s next creative director — wide enough to cover some very big fish, including none other than Marc Jacobs.
This story first appeared in the June 10, 2013 issue of WWD. Subscribe Today.
The inclusion of Jacobs’ name on the dream list of candidates for the Coach job is igniting a whirlwind of speculation — from whether the designer’s contract at Louis Vuitton will be renewed when it expires at the end of the year to whether Jacobs, and his partner LVMH Moët Hennessy Louis Vuitton, could follow in the footsteps of Michael Kors and go for an initial public offering of his namesake brand.
It could not be learned whether Jacobs has been contacted about the Coach job and sources stressed his inclusion on the list of candidates is speculative at this point. According to sources, other candidates on the list include the likes of former Balenciaga designer Nicolas Ghesquière, Chloé’s creative director Clare Waight Keller, Derek Lam, Phillip Lim, and Emma Hill, former creative director at Mulberry.
Coach is searching for a successor for Reed Krakoff, president and executive creative director, who is stepping down after a 16-year career helming the New York-based accessories powerhouse. He is to make a final exit in June 2014 to concentrate on his high-end namesake brand, although sources said he could exit sooner if a successor is found.
RELATED STORY: Reed Krakoff Exiting Coach to Focus on Own Line >>
Coach, which launched Krakoff’s brand two-and-a-half years ago, said it would explore “strategic options” for the Reed Krakoff collection that “may involve a sale to a group, in which Krakoff would participate.” On Friday, sources confirmed a Wall Street Journal report that Coach has hired Perella Weinberg to handle a sale of the Krakoff brand. A Coach spokesman declined comment on the report.
Karen Harvey Consulting has been hired to find Krakoff’s successor at Coach. Executive search specialists have suggested the company is also likely to look at high-profile “executive designers” in global brands such as Louis Vuitton, Burberry and Jimmy Choo.
One possible successor to Krakoff in this category is Deborah Lloyd, president and chief creative officer of Kate Spade.
Coach is also said to be searching for a chief merchandising officer, considered a crucial post that will work in tandem with the future creative director.
Jacobs is surely the most intriguing of possible targets for the creative director role, suggesting the industry at large views an exit from Vuitton — despite his blockbuster tenure at the French leather goods giant — as a possibility.
It is understood Jacobs and Robert Duffy commenced discussions to renew their current Vuitton contracts sometime back in 2012. Earlier this year, the designer referenced meetings he had to attend on the subject. Jacobs and Duffy revealed they had signed 10-year contracts with Vuitton in 2004 that extended their employment there through 2013.
According to a Paris source, LVMH Moët Hennessy Louis Vuitton has not conducted parallel talks with any other potential candidates to take over the creative helm at Vuitton, dampening widespread speculation that Ghesquière is the heir apparent. He has been dropping hints, privately and in interviews in niche magazines, that he’s got a big project looming — and he is frequently seen in the company of LVMH executives in Paris.
Ghesquière declined all comment on “rumors about future projects.”
According to market sources, negotiations Jacobs is conducting with LVMH have extended beyond his Vuitton contract and could see his entanglements with the French group altered or recalibrated.
In broad terms, the New York-based operating company, Marc Jacobs International, is majority controlled by LVMH, the parent of a galaxy of brands in fashion and leather goods, wines and spirits, watches and jewelry, perfumes and cosmetics, and selective retail. The ownership of the Marc Jacobs trademarks, meanwhile, is split equally between LVMH, Jacobs and Duffy, who is president of Marc Jacobs International.
Among the wilder possibilities floated during talks, according to a Paris source, has been a possible spin-off and initial public offering of Marc Jacobs. One impetus would be to maximize the potential of Jacobs’ business, believed to be approaching the $1 billion revenue leagues, as an independent company.
No doubt the runaway success of Michael Kors’ 2011 placement on the New York Stock Exchange, and a stock market that’s hungry for new offerings, has compelled Jacobs and Duffy to consider that lucrative option.
To be sure, the partners are gearing up to jump-start growth at Marc by Marc Jacobs, a sprawling contemporary brand launched in 2000 and considered the growth engine of the company. Late last month Duffy named Katie Hillier and Luella Bartley as creative director and design director of women’s ready-to-wear, respectively, to get the brand back on the growth track.
Sources stressed that the spin-off scenario is a separate negotiation to the Vuitton contract renewal, and the likelihood of an agreement on either subject could not be learned.
Another Paris source strongly downplayed the likelihood of a spin-off, noting that LVMH continues to invest heavily in Jacobs’ business, spurred on by its rapid international success, and that the French group has no need to seek outside funding.
LVMH chairman and chief executive officer Bernard Arnault is loathe to off-load businesses in his sprawling luxury empire, especially ones with great expansion potential like Jacobs. What’s more, he is said to have formed a strong bond with the designer and Duffy over their long partnership.
In any event, if Jacobs, Duffy and LVMH were to entertain the possibility of a listing, it could take a couple of years to lay the groundwork.
Duffy declined to comment on its talks with LVMH, saying only they are ongoing.
An LVMH spokesman had no comment.