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Investor Eyeing Lanvin?

Middle Eastern firm said in talks for stake.

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PARIS — Could Lanvin, one of today’s hottest designer brands, be zeroing in on a financial partner in the Middle East?

This story first appeared in the September 10, 2008 issue of WWD.  Subscribe Today.

According to market sources, Lanvin owner Shaw-Lan Wang has been in talks to sell a stake in the French fashion house to an investment vehicle linked to Qatar’s ruling family.

The likelihood of a deal could not immediately be learned. “Nothing is cast in stone yet,” noted one industry source, declining to name the entity.

Still, the negotiations underscore how Wang is actively exploring possible additional financing at a time when the brand is enjoying strong momentum and reporting rapid sales growth.

Lanvin officials could not be reached for comment Tuesday.

WWD reported June 12 that Wang, who bought Lanvin from L’Oréal in 2003, has been seeking a capital increase in return for a minority stake to speed growth of the French fashion house, which is underdeveloped versus its competitors in terms of product categories and retail expansion.

It is understood that Wang is seeking to sell 35 to 40 percent of Lanvin at a price that would value the business at up to 200 million euros, or $283 million at current exchange.

Many potential suitors have kicked the tires at Lanvin in recent years — including most of Europe’s big luxury groups — but most balk at Wang’s desire to maintain management control and other conditions, sources said.

Any deal likely would hinge on the blessing of Alber Elbaz, the top designer who has catapulted Lanvin into fashion’s major leagues with his soigné and feminine dresses, romantic costume jewelry and coveted ballerina flats. Any potential investors would want to secure Elbaz’s services as a key asset, sources said.

In August 2007, Lanvin sold its fragrance and cosmetics business to Inter Parfums SA for 22 million euros, or about $30 million, saying it needed the funds to develop its ready-to-wear and accessories businesses.

Partnering with local retailers, Lanvin plans to open about a dozen boutiques during the next year in the Middle East, Europe and India. The company is set to open a new-look men’s boutique on London’s Savile Row this month, and is overhauling its men’s wear flagship on the Rue du Faubourg Saint-Honoré here.

The company, which entered the black last year, is projecting sales growth in the range of 40 percent for 2008.

Any deal would be further evidence of how increasingly wealthy investors in the Middle East, Asia and Russia are beginning to eye European and American brands as potential acquisition targets. While the credit markets in the U.S. have basically frozen acquisition activity in retail and apparel in America, soaring prices for oil and other commodities have left investors in developing nations flush with cash.

And retail and luxury goods are right in their sights. Istithmar last year acquired Barneys New York for $942.3 million and plans to expand the specialty store with additional units in the U.S. and overseas; Emaar Properties in Dubai is said to have signed a deal to open a Bloomingdale’s in Dubai, and M1 Group of Lebanon bought Façonnable last year for $210 million. Outside of fashion, but still luxury goods, the Tata Motors of India acquired the upscale Jaguar and Land Rover car companies from Ford for $2.3 billion earlier this year.

Further evidence of Asian and Middle Eastern firms on the acquisition prowl came only last week when Onward Holdings Co. of Japan bought Jil Sander from Change Capital Partners for 167 million euros, or $244.1 million. “Our basic strategy is to secure solid earnings in Japan and accelerate growth of overseas activities, and we are right on the jumping phase to grow with Jil Sander,” said Takeshi Hirouchi, Onward Holdings’ chairman and chief executive officer. Onward foresees Sander’s sales reaching 22.5 billion yen, or $208.3 million, this year, growing to 27.5 billion yen, or $254.6 million, in three years and to 33 billion yen, or $305.6 million, in five years.

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