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According to market sources, Balenciaga and parent Kering have decided not to renew the contract of the buzzy American designer, precipitating another designer change at one of the most prominent houses in French fashion.
It is understood that the spring 2016 Balenciaga show during Paris Fashion Week, scheduled for Sept. 29 to Oct. 7, will be Wang’s last.
The precise reasons for the separation could not immediately be learned. It is understood that the search for Wang’s successor is in its early stages.
According to one Paris source, Kering is open to considering a lesser-known, hidden talent for the plum post, emboldened by the positive feedback and outpouring of goodwill it had in promoting Gucci insider Alessandro Michele to succeed Frida Giannini at the helm of the Italian brand earlier this year. That could make the guessing game of “who’s next” a more complicated enterprise.
WWD was the first to report on July 3 that a change in creative leadership at Balenciaga was likely as speculation mounted in Paris that Wang would part ways with the French fashion house, which is marking its centenary in 2017. At the time, spokeswomen for Kering and Wang would only say there were discussions between the designer and Balenciaga regarding the renewal of his contract.
As recently as Monday, when Kering reported first-half results, the company toed the same party line. Responding to media inquiries during a conference call, Kering’s chief financial officer Jean-Marc Duplaix told journalists that “there are ongoing discussions and I won’t comment further.”
Wang was hired in December 2012 as the successor to Nicolas Ghesquière, who exited after a stellar 15-year tenure and subsequently joined Louis Vuitton.
As recently as last March, ahead of a fashion show attended by Lady Gaga, Balenciaga touted accelerating double-digit growth, with Wang telling WWD: “I feel we’re already a globally recognized house, and a top luxury leader. We’re well on our way.”
Market sources estimate Balenciaga generates revenues north of 350 million euros, or $387.2 million at current exchange rates, and is profitable.
Wang and Balenciaga chief executive officer Isabelle Guichot at the time described a host of development plans for the company, citing men’s wear and knitwear among chief growth opportunities. Guichot said the double-digit gains last year were fueled by “almost all categories, from retail and a very healthy wholesale business.” Balenciaga counts about 500 wholesale doors in the world.
More than half of company revenues stem from directly owned retail, a threshold reached last year, when it closed out the calendar with about 90 freestanding stores and shops-in-shop — a quantum leap from the three stores it had seven years ago.
The brand added about 10 stores in 2014, and also has a program of refurbishments, enlargements and relocations. Key openings this year include a boutique in Florence.
Balenciaga also touted itself as an important player in women’s footwear, and trumpeted progress in the leather goods category, building beyond historic “pillars” like the motorcycle bag, which was launched 15 years ago. Newer styles like the Cable, Le Dix and Nude bags are seen as driving the business now.
Telegraphing the brand’s importance to Kering, Balenciaga is to move to the luxury and sporting goods conglomerate’s new headquarters in Kering’s forthcoming headquarters in a complex boasting a series of 17th-century stone buildings in cross formations. The Laennec complex was seen as a natural fit as most of Balenciaga’s operations were already located on the Left Bank, offices scattered on streets in the vicinity of its Rue Cassette showroom, once the site of its fashion shows.
About 250 employees are to be based at the new complex, including the design studio, atelier and showrooms.
A designer in the edgy fashion mold of Ghesquière, but with a streetwise twist, Wang is one of the darlings of the American fashion scene with his music-scene buddies, groovy T-shirts, studded handbags and high-impact fashion shows. He brought his flair for showmanship to Balenciaga, staging one show on a glass platform under which roiled dark smoke. He also imbued the brand with a darker, Goth-tinged mood, mostly designing clothes in black and white.
Separately, sources said Wang has been quietly seeking an investor for his privately held namesake brand, and may feel tugged between responsibilities at both businesses, as reported.
Wang’s likely exit at Balenciaga comes as Kering focuses on the ongoing turnaround at Gucci under Michele and that company’s ceo Marco Bizzarri. On Monday, Kering said Gucci saw organic sales rise 4.6 percent in the three months to June 30, largely exceeding consensus expectations for a 3.2 percent decline. Overall, Kering reported a 13 percent drop in net earnings to 489.2 million euros, or $541.1 million, in the first six months of 2015, while sales jumped 22.8 percent in the second quarter to 2.86 billion euros, or $3.16 billion.
The impending change at Balenciaga also will come as a new executive takes over as ceo of Kering’s luxury couture and leather goods emerging brands, which include Balenciaga as well as Brioni, Alexander McQueen, Christopher Kane, Stella McCartney and Tomas Maier. Kering on Monday named former Unilever executive Grita Loebsack to the post, effective Sept. 14. The ceos of the six companies in the emerging brands group will now report to Loebsack.