Max Azria Set for Beauty Redux

Max Azria is jumping into beauty - and more. The chairman, ceo and designer of BCBG Max Azria Group said his $2 billion company based here is preparing to...

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VERNON, Calif. — Max Azria is jumping into beauty — and more.

This story first appeared in the January 31, 2008 issue of WWD.  Subscribe Today.

The chairman, chief executive officer and designer of BCBG Max Azria Group said his $2 billion company based here is preparing to revisit the world of fragrances and launch makeup in 2009 or 2010.

In addition, Azria, 59, said an initial public offering is “a work in progress,” and outlined plans to expand his licensed accessories business and focus on growing the two highest-end brands in the company’s 15-brand portfolio: MaxAzria, his designer collection, and Hervé Léger by Max Azria, the ready-to-wear collection based on the French couture house that Azria acquired in 1998.

Regarding the beauty business, Azria said, “I am meeting with a big company next month,” which he declined to identify. The BCBG brand has no current signature fragrances. The company had a BCBGirls quartet of scents — the license with Unilever expired before the 2005 sale of Unilever’s prestige beauty business to Coty.

Experts speculated that Azria might partner with a marketer that has a smaller portfolio of existing brands and the ability to focus closely on and build Azria’s beauty business.

Among BCBG’s competitors in the contemporary market, those with successful fragrances include Juicy Couture, L.A.M.B. and Marc Jacobs’ Daisy fragrance, which is aimed at the contemporary Marc by Marc Jacobs customer. The market for fragrances by contemporary apparel companies is an otherwise open field. Recent U.S. designer fragrance launches include a signature John Varvatos women’s scent and a Narciso Rodriguez men’s scent that kicked off last summer. Elizabeth Arden just signed a deal with Alberta Ferretti to launch a scent in 2009.

Azria’s Hervé Léger brand produces two fragrances, Hervé Léger, created in 1999, and Rose Léger, which started the following year. Both were initially produced by Procter & Gamble but were brought in-house in 2001.

Azria spoke about the future of his 19-year-old company amid preparations for a triple play during New York Fashion Week. He will present BCBG Max Azria and his namesake collection, as well as the New York runway debut of Hervé Léger by Max Azria.

Amid speculation about an IPO, Azria confirmed that he has hired a co-chief financial officer, Thimio Sotos, a 13-year veteran of Jones Apparel Group, who held the same post there before resigning last March and relocating to California in August. Brian Fleming remains at BCBG Max Azria Group as the other chief financial officer. The hire suggests an IPO, which Wall Street has anticipated for two years.

Sources close to the company said the IPO will likely take place in 2009. “Yes, I have two cfo’s, but it’s better to have four eyes looking at the business than two,” Azria said.

Judging by the number of bankers invited to the runway shows, Azria is counting on having far more than four pairs of eyes on his company next week. The practice is standard among companies courting prospective investors.

Azria, a native of French Tunisia who often slips into French turns of phrase, said he plans a major expansion of accessories, which makes up 15 percent of his business. The company already licenses for shoes, sunglasses, belts and jewelry, and produces bags in-house. Azria said this quarter is the time for “big action. I am focusing a lot on this, about 20 or 30 [deals]. I cannot talk before I close deals because I like to deliver, always, but we are going very far.”

However, Azria said much of his focus for 2008 will be on the MaxAzria designer collection and Hervé Léger by Max Azria.

“We have a lot of incentive to push these two brands because people like it, so we respond to the market,” he said. “We want to have an even bigger presence in the high market, and we have the technology and the vision to do it.”

Azria’s other brands include the contemporary line BCBG Max Azria, MaxAzria Atelier, BCBGeneration, the young contemporary brand launching at WWDMAGIC this month, and several brands sold exclusively in Europe, Manoukian and Max Rave among them.

Azria also produces a line for French department store Carrefour called Tex by Max Azria in a deal that is said to include minimum guarantees of $1.4 billion through 2011, according to Fortune magazine. The line is sold in Carrefour stores in France, Spain, Italy, Belgium, Portugal and Greece. He has a history of acquiring European retail chains, such as Alain Manoukian and Don Algodon, as well as brands. The most recent was French sportswear label Dorotennis, which he bought from the European investment firm Argos Sodotic this month for an undisclosed amount. Dorotennis is an offshoot of the French label Dorothée Bis that Azria acquired in 2003 with plans to resurrect.

BCBG Max Azria Group, which employs 16,000 people worldwide, including 9,000 in the U.S., operates a global business model with factories in China and the U.S. There are 479 BCBG stores worldwide, and more than 13,500 retail and wholesale points of sale.

Despite the global economic volatility, Azria said his company ended December with same-store sales gains of 9.4 percent and overall earnings gains of 23 percent.

“It is better for me not to hear what the media is saying because I am doing better than ever,” he said. “People tell me this and that, but I am an old animal. I’ve seen everything. And I think the people react too fast and scare themselves. People who start the day thinking about catastrophes have no chance at the end of the day. I wake up in the morning so happy to be alive and healthy.”

Azria said one of his biggest challenges will be topping his 2007 numbers, but he affirmed that in its current state of private ownership, the company’s sales are close to doubling “organically, without looking at other options. For the moment we have very clear visibility to hit the $4 billion or $5 billion mark between now and the next three years, easy,” he said.

As for long-term plans, Azria said, “I think nobody can talk about five years from now. With globalization and politics today, we are in an economy where you cannot talk more than six months to a year. You cannot put your car in automatic, you have to be in control at all times, and the car is going too fast. Today we do in one year what we used to do in 10 years. I like to plan every two or three months, and when I hit the six-month mark, then I can start thinking about the year.”

Azria seems unfazed by his agenda, including a hectic fashion week. In fact, his eyes danced when he said, “It’s a lot of work, but these gymnastics are part of my job. I can do even 10 collections if I wanted to.”

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