PARIS — The battle between the management of Lanvin and its works council following the departure of creative director Alber Elbaz has ended up in a Paris court.
Lawyers for both sides duked it out at the Tribunal de Grande Instance on Tuesday, after the management of Lanvin launched legal proceedings against the works council to stop it from using the company’s e-mail and messaging boards to share information with members of staff regarding the designer’s ouster.
Johann Sultan of CBR & Associés, representing the company, also asked judge Pénélope Postel-Vinay to suspend the “right to notify” procedure launched by the group of employee representatives, which says it is concerned about the economic and social welfare of Lanvin following what it calls the “brutal” eviction of its star designer.
Sultan told the court that Elbaz was let go after he tried to sell his shares in “another company in the Lanvin group.”
A spokeswoman for Lanvin subsequently clarified that Elbaz does not directly own shares in Jeanne Lanvin S.A., of which 75 percent is held by Chinese-born magnate Shaw-Lan Wang and the remaining 25 percent by German entrepreneur Ralph Bartel, via parent company Arpège SAS.
She added that Elbaz held shares in another company belonging to Wang, without providing additional details.
Sultan told the court that Elbaz held “advanced talks” behind Wang’s back to find a buyer for Lanvin and subsequently spoke out at the company’s board meeting. “There was absolutely no questioning of his creativity,” he said of the reasons for the designer’s dismissal. “This was just all about the big bucks.”
Elbaz was subontracted to Lanvin via his company AEK Designs, according to Isabelle Schucké-Niel of law firm Schucké-Niel Avocats, representing the works council.
A private limited liability company under sole ownership, AEK Designs posted annual revenues of 5.6 million euros, or $7.5 million, in 2014, down from 5.9 million euros, or $7.8 million, in 2013, according to public records. All dollar rates are calculated at average exchange rates for the period concerned.
Schucké-Niel told the court that the designer’s severance package could cost Lanvin between 20 million euros and 40 million euros, or $27.5 million to $55 million at current exchange.
However, she added that Lanvin chief executive officer Michèle Huiban had told staff representatives she did not yet have an estimate of the cost of firing Elbaz. “Senior management afforded itself the luxury of a whim without even knowing how much it would cost,” Schucké-Niel said ironically.
She pointed out that the additional outlay comes in a year when Lanvin is poised to post its first loss since 2007. Lanvin’s profits declined from 11.9 million euros, or $15.3 million, in 2012 to 5.7 million euros, or $7.5 million, in 2013 and 2.9 million euros, or $3.9 million, in 2014, according to public records.
“Yes, orders are down,” Sultan said, adding that this was due to a combination of economic factors – including declining demand from Russia and Hong Kong and unfavorable exchange rates — and the fact that Lanvin has only a modest accessories business. However, he said the company was in good health.
“Today, the house of Lanvin comfortably has the means to cope with this decline in orders,” he added. “There are only positive signs. No layoffs are being considered.”
He pointed out that the company had no trouble securing a bank loan recently to buy back the brand’s Japanese operations from Itochu Corp.
Sultan accused the works council of misinforming and lying to staff, and said it had no right to use the company e-mail to discuss management decisions. “The content is violent and disparaging,” he said. “It is 100 percent reminiscent of a union handout.”
He asked the judge to order staff representatives to take down several documents posted on the company’s bulletin boards, including two letters written by Elbaz.
Schucké-Niel asked the judge to dismiss all the company’s requests, saying the works council was up against “an opaque system of obstruction and autocracy” that did not approve of employees seeking information about the company’s finances.
Both sides requested damages and interest in the case. The ruling has been scheduled for Dec. 16.