According to court documents obtained by WWD, the Frenchman received 32 million euros, or $42.3 million at current exchange, for his 10 percent stake in Balenciaga, as well a 6.6 million euro indemnity ($8.7 million) for breaking his contract before its expiration date.
Balenciaga is seeking to recover 7 million euros ($9.3 million) alleging that Ghesquière violated his exit agreement when he granted an interview to System magazine and, the lawsuit claims, besmirched the company’s reputation.
No matter the outcome of that legal case, those compensation figures surely shattered the myth of the starving-artist fashion designer.
“What is atypical about the fashion industry is that it’s not uncommon for a creative director to earn more than the ceo,” says Hugh Devlin, a lawyer at London-based firm Withers Worldwide, who has advised creative directors working at Mulberry, Givenchy, Pucci, Pringle, Aquascutum, Chloé and Alexander McQueen.
Legal experts agree it’s rare for an employee designer to be granted a percentage in a heritage brand.
According to sources, among the happy few is Alber Elbaz, Lanvin’s creative director, who holds a sizeable stake in the Paris-based fashion house via shares in a holding company controlled by majority owner Shaw-Lan Wang.
Betsy Pearce, the American lawyer who represented Ghesquière when Gucci Group acquired the brand in 2001 and granted him the equity stake, says the Italian conglomerate was keen to retain Ghesquière and motivate him to build the Balenciaga brand, which then enjoyed a “halo of luxury” but was still a very small-scale business.
“The challenge is to have the designer as motivated as possible for a medium-term change in value,” Pearce explains in an interview. “Nicolas was there at the right time and under the right circumstances.”
The context was an acquisitions spree by Europe’s big luxury players, and Gucci Group spied in him the potential to remake Balenciaga into a fashion leader.
“That’s the deal that works: when there’s legitimate motivation and an actual opportunity to cash out rather than circumstances that are illusory,” Pearce says.
She and Devlin agree history could repeat itself if a private-equity fund acquiring a fashion brand wishes to incentivize a designer by granting a partial stake.
In such a scenario, “at a certain level, the designer is as important as the ceo in bringing that company from point A to point B,” Pearce notes.
Most designers and creative directors engaged by a brand are simply paid a salary and bonus, the latter usually linked to personal performance, according to Devlin. He noted it’s more unusual when bonuses are linked to an increase in sales.
According to sources, when LVMH Moët Hennessy Louis Vuitton engaged former Chloé creative director Phoebe Philo to remake its sleepy Céline brand, the English designer was granted an equitylike “trust” that grows according to certain profitability thresholds and upon which Philo can draw at specific vesting intervals.
Devlin said star designers today are earning as much as they were a decade ago. Sources estimate those amounts are creeping into the high-single-digit millions.
But that could change.
“There’s more resistance now to the superstar salary than was the case 10 years ago,” Devlin says.
“The groups are realizing that the brand should be the star, not the designer. If you look at some of the bigger brands, they don’t necessarily make their money from the catwalk collection,” he adds, noting there are often important design talents behind the creative director who are in charge of lucrative categories.
Given their high salaries, media profiles and the competitive environment, are today’s designers traded like pro athletes?
Not really, Pearce says, because non-compete clauses typically bench designers for a period of at least six months to a year.
In a context of scarce design talent and fierce competition between rival luxury players, brand owners are increasingly focused on non-compete clauses, Devlin says. “The groups are tending to focus on protecting themselves and making it difficult for their creative directors to be poached,” he explains.
At press time, Ghesquière was considered a frontrunner to succeed Marc Jacobs as the artistic director of Louis Vuitton.
“What he has done at Vuitton is really exceptional,” said @gameofthrones’ actress Gwendoline Christie on @mrkimjones’ final show for @louisvuitton. “He has rebooted luxury in terms of making it commercial, viable and contemporary. And most importantly artistic. He has never compromised his artistic vision for the sake of commodity.” (📷: @zefashioninsider)
After seeing a demand for men’s wear from its customers, British contemporary women’s wear label @ariesarise has added a men’s wear component and will launch a unisex collection with @mrporterlive. The 20-piece collection includes jackets, denim, logo T-shirts and more with deconstructed ‘90s vibes. Set to launch on January 18, you can shop the pieces on Aries’ website and on mrporter.com. #wwdfashion
“And so spending so much time with a character who thinks like that, inevitability you try and analyze yourself and go back and think about your own demons and dark chapters that you had in your life,” says @thedanielbruhl of his role in TNT’s “The Alienist.” The show, set in the Gilded Age of New York, also stars Dakota Fanning and Luke Evans. Head to WWD.com to read about how 39-year-old Brühl prepared for the role and why he thinks the show is so relevant to today #wwdeye ( 📷: @Eriktanner)
Now that Celine Dion’s collection has topped $10 million in sales, the pop superstar, fashion icon and newly-minted industry player is eyeing growth in Asia. Read the full report by @tiffanyap, link in bio. #wwdnews #celinedion
“My personal philosophy to beauty is paying attention to oneself. I love to be outdoors, lots of fresh air, trying to take care of yourself as best you can. I always notice that comes through,” says Felicity Jones, the global face of @shiseido-owned @cledepeaubeauteus, which launches today. Head to WWD.com to read more about the actress’ love for beauty and how she prepared for her new role in “The Basis of Sex,” playing the young Ruth Bader Ginsburg. #wwdbeauty (📷: @dandoperalski)
Among the familiar faces at @off____white’s show was a surprise figure: Japanese artist @takashipom, pictured here on Wednesday morning. Other show-goers included @jerrylorenzo, who spoke about his upcoming project: a @nike collaboration for back to school, with designs inspired by his childhood on the West Coast. Sitting in the front row were Future, Don Crawley, @miguel and more. See the rest of the photos on WWD.com #wwdeye (📷: Stephane Feugere)
According to @laurentsai, former “Terrace House: Aloha State” cast member, she didn’t know she was auditioning for the Japanese version of “Real World.” “I was telling a couple of my friends and someone’s like, ‘That sounds a lot like Terrace House.’ I was like, ’No it can’t be.’” Turns out, it was. But Tsai isn’t just a reality star — she’s an illustrator who has worked with Starbucks Japan and most recently, she’s dipping her toes into the fashion world. Head to WWD.com to read about her time on the show, modeling and her art. #wwdeye (📷: @danieldorsa)
More changes are coming to New York Fashion Week: Beginning with the spring 2019 collection, @alexanderwangny will move his New York show to June from September, adopting a biannual schedule with collections shown in June and December. Additionally, the @cfda is planning for an official summer/winter fashion season taking place as soon as June and December 2018. Read more about the upcoming changes on WWD.com. #wwdnews #wwdfashion (📷: @slovekinpics)