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Hermès in Talks to Sell Gaultier Stake

Spain's Puig seen as front runner to acquire French house.

PARIS — Hermès International and Jean Paul Gaultier — unlikely bedfellows since 1999 — moved a step closer to a full divorce Friday when Hermès said it has initiated discussions to sell its 45 percent stake in Gaultier following “an expression of interest from potential buyers.”

 

Sources today described Spain’s Puig, owner of Carolina Herrera, Nina Ricci and Paco Rabanne, as a front runner to acquire the French fashion house — and gain access to its lucrative fragrances business.

Last year, Hermès ended its seven-year design collaboration with Gaultier, who was tapped in 2004 to succeed Martin Margiela as its designer of women’s ready-to-wear. The madcap couturier was recruited and championed by former Hermès chief executive officer Jean-Louis Dumas, who died in May 2010.

Christophe Lemaire, best known for his earlier role as Lacoste’s creative director, was named Gaultier’s successor and showed his first women’s collection last month during Paris Fashion Week, a quiet parade without the humor or antics unleashed every season by Gaultier.

Hermès bought 35 percent of Gaultier in 1999 by investing $23.4 million in the business. The plan was to expand the designer’s network of boutiques at the rate of three a year. At present, there are about 30, with a new one slated to open soon in Taiwan.

In 2008, Hermès raised its stake in Gaultier to 45 percent. The same year, Hermès Parfums’ ceo Véronique Gautier was appointed president at the Gaultier fashion house, suggesting tighter synergies between the maker of Birkin bags and silk scarves and the maverick designer, who has put men in skirts and Madonna in conical bustiers.

But Gautier exited the role in mid-2010 to become international general manager of Giorgio Armani Parfums. The designer himself took on the title of president and put Caroline Le Borgne in charge of day-to-day operations at Jean Paul Gaultier. She has been Gaultier’s deputy managing director since September 2006.

“We are aware that Hermès has been approached,” said a Gaultier spokeswoman.

She declined to comment on reports suggesting the designer initiated a sale effort to raise capital for expansion.

It is understood the Gaultier fashion house remains loss making, despite healthy royalties from beauty licensee Beauté Prestige International.

According to Hermès’ most recent annual report, 2009 revenues at Gaultier, derived mostly from licensing royalties, dropped 19 percent to 23 million euros, or $32.1 million at average exchange rates for the period. According to official records, the company posted losses of about 2.9 million euros, or $4.1 million. Sources indicated Gaultier logged an increase in sales and losses narrowed in 2010.

Aeffe SpA, which produces and distributes Gaultier’s signature collection, recently said 2010 sales of the line edged down in the low double-digits.

Sources said Gaultier’s perfume operation remains the key asset of the business, along with the designer himself, who has a cultlike following. BPI — Shiseido’s high-end fragrance arm — has held the Gaultier fragrance and cosmetics license since 1990 and renewed it in 2000 for 15 more years.