BERLIN — Jean-Marc Loubier has been named the new chief executive officer of Escada AG, effective Friday.
At an extraordinary meeting of the Escada Supervisory Board in Munich Wednesday, Loubier was named to replace Frank Rheinboldt. Speculation about the impending change had been circulating since last week, though the friction between Rheinboldt and majority shareholder Rustam Aksenenko over Escada's fledgling accessories business has long been an issue.
Loubier has been a member of the Escada supervisory board and chairman of its strategy committee since November 2006. The former LVMH Moët Hennessy Louis Vuitton executive served as president and ceo of Celine from 2000 to 2006, and was executive vice president of Louis Vuitton from 1990 to 2000.
In a statement, Loubier said, "Escada is a wonderful brand and I am proud to join its team. Together, we will define and implement a precise strategy based on the development of a strong brand identity, relaunch Escada ready-to-wear, create a leather goods business, reorganize the retail network and focus on our core markets."
An Escada Group veteran of 16 years, Rheinboldt assumed the top post in February 2006, succeeding the company's founder, Wolfgang Ley. Rheinboldt kept a relatively low profile for the first six months of his tenure, adapting internal structures involving such issues as EDP, customer service and work-flow optimization. But in the fall, he made more visible changes, bringing in former Valentino design director Damiano Biella as Escada's new creative director and instituting a two-year program for the renovation of the major Escada doors. Starting in November, the brand's new retail look began to bow in cities including Munster, Germany; Hamburg; Vienna; Beverly Hills; Mumbai; Beijing, and London. The company planned to make 20 to 25 refurbishings per year.
But for Aksenenko, whose Geneva-based holding company Finartis holds a 25.5 percent stake in the German fashion house, the changes were coming too slowly and did not begin to address the expansion of Escada's admittedly small accessories business. Accessories, which had been taken in-house, generated 7 percent of the brand's sales of 489.2 million euros, or $614.5 million at average exchange rates, in the fiscal year ended Oct. 31, 2006. Aksenenko has long complained this deviates from the successful strategy of established competitors in the luxury market like Gucci and LVMH.The announcement was expected, said Deborah Aitken, analyst at West LB in London, but "the market overall feels Rheinboldt didn't have enough time. He had a good history with the company and did very well at turning around the more mass market brands at Primera," a division of the Escada Group including the brands Apriori, Biba, Cavita and Laurèl.
The Primera business, however, was another point of dissent between Rheinboldt and Aksenenko, who thought the Primera brands should have been sold off and the money used to not only build Escada's accessories business, but reorganize and renew the old stores at a faster pace.
"Loubier has an excellent knowledge of the luxury business and luxury retail," she added, and suggested that "initially, share prices will move upward, but there will be uncertainty in the market till they announce a new strategy. The issue of Primera will come up again, and what the money (from a sale to private equity) could be used for. It will be an interesting time, but this seems to be happening all across the sector."
Escada shares closed in Frankfurt at 37.78 euros, or $50.53, up 1.28 percent.
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