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PARIS — A new era could be dawning at Louis Vuitton — and at Marc Jacobs International.
This story first appeared in the September 30, 2013 issue of WWD. Subscribe Today.
Vuitton and its parent, LVMH Moët Hennessy Louis Vuitton, are enmeshed in complex negotiations that could see designer Marc Jacobs wind up his stellar 16-year tenure at Vuitton in order to focus on taking his signature brand to the next level, possibly with an initial public offering, sources said over the weekend.
Parallel to that, Vuitton has held talks with Nicholas Ghesquière about succeeding Jacobs as artistic director of the French luxury brand, the same sources said.
But the denouement may not arrive as quickly as some might have expected.
Talks with Ghesquière — considered the leading contender for the Vuitton crown in a post-Jacobs era, and the talk of Paris Fashion Week — have not been concluded. The likelihood of an agreement with him could not immediately be learned.
Despite speculation that Jacobs — whose current 10-year contract with Vuitton expires in the coming months — could do a swan song with his spring fashion show for the brand on Wednesday, it is understood he could yet be tapped to do more Vuitton collections, including the fall show in March.
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Adding an additional frisson of intrigue, Wednesday’s show on the final day of Paris Fashion Week could involve retrospective or archival elements, other sources said. If that’s the case, the runway spectacle could provide a glance back at a fruitful collaboration that helped catapult Vuitton’s — and Jacobs’ — global profile.
Reached on Sunday, an LVMH spokesman had no comment, and Jacobs, in the throes of his show preparations, could not be reached for comment.
WWD broke the news on June 10 that talks to renew Jacobs’ contract with Vuitton centered on recalibrating LVMH’s business relationship with the Marc Jacobs brand — with the Vuitton contract initially a footnote to those discussions.
It is understood an eventual public listing for the Jacobs business remains one of the leading scenarios because it would allow the parties to capitalize on a U.S. market hungry for new share offers, and to resolve complex business entanglements.
Besides owning a majority stake in the operating company Marc Jacobs International, headquartered on Spring Street in Manhattan, LVMH holds one third of the Jacobs trademarks. Jacobs and his longtime business partner, Robert Duffy, who is president of Marc Jacobs International, hold another third each.
Those arrangements date back to 1997, when Jacobs was tapped as artistic director at Vuitton and charged with marching the heritage leather goods brand into ready-to-wear and other fashion categories.
According to sources, talks between Jacobs, Duffy and LVMH over the road map for the future recently hit a roadblock.
While the parties face no deadline, since beyond Vuitton they are linked via ownership of the Marc Jacobs business and brand, they all must agree as co-shareholders on plans for the Jacobs company.
“They’re married for the future,” one source said of the parties. “The question is how they change their relationship.”
It is understood LVMH officials are eager to capitalize on the potential of the Jacobs business, but Jacobs and Duffy “are not yet on board,” the source added.
Having Jacobs dedicated fully to his own brand is seen as a requirement to assure the highest possible valuation for an eventual IPO.
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The road to a listing could be a long one in order to sift through complex value equations. Since LVMH took a stake in Jacobs, the partners have introduced the contemporary brand Marc by Marc Jacobs and rolled out a global network of stores, also extending into businesses ranging from licensed children’s wear to book retailing.
Market sources estimate sales for the entire Jacobs brand across retail is approaching the billion-dollar leagues.
Most recently, Jacobs launched a range of color cosmetics exclusively at LVMH-owned perfumery chain Sephora, which one source described as one of the strongest introductions in the retailer’s history, signaling the brand’s potential.
No doubt Jacobs and Duffy took notice of the staggering valuation Michael Kors achieved when he listed his New York-based fashion house in 2011. Today, the Kors company’s market capitalization is estimated at $15 billion.
Kors, from the same generation as Jacobs, has already cashed out some of his shares and pocketed hundreds of millions of dollars.
(Ironically, LVMH once owned a one-third stake in Michael Kors, which it took in 1999 when Kors was designing its Céline brand. Silas Chou and Lawrence Stroll bought 85 percent of Kors in 2003, including the LVMH stake.)
Meanwhile, speculation about Ghesquière’s future has dominated front-row chatter during the European shows.
That he could wind up at LVMH was a scenario that emerged shortly after Ghesquière parted ways with Balenciaga last November after a 15-year tenure. The Frenchman is frequently seen in the company of designers and executives from LVMH.
Indeed, only weeks after the split from Balenciaga, Ghesquière attended a private Dior dinner attended by the likes of Delphine Arnault, daughter of LVMH kingpin Bernard Arnault and now second in command at Vuitton, and Camille Miceli, Dior’s artistic director for costume jewelry, who had previously held the same role at Vuitton.
WWD has learned that Ghesquière also was approached in recent months by Japanese fashion giant Fast Retailing Co. Ltd., parent of the Uniqlo chain, about a collaboration along the lines of its +J project with Jil Sander from 2009 to 2011.
However, those talks were characterized as preliminary and have ceased. Ghesquière has been mum about his intentions, while hinting in interviews published last May in System and 032c magazines that he was fielding offers and would soon be back to work.
It is understood Ghesquière has talked to various parties, including LVMH and Fast Retailing, about the possibility of launching a signature fashion house.
The designer is currently embroiled in a lawsuit with Balenciaga over declarations made in System. As reported in WWD on Sept. 4, Balenciaga is seeking damages of 7 million euros, or $9.2 million at current exchange, charging that Ghesquière violated their separation agreement, which stipulated that he refrain from declarations that could damage the image of Balenciaga.
Lawyers for Ghesquière and stylist Marie-Amélie Sauvé, who is also named in the suit, are to deposit their arguments at the Tribunal de Grande Instance of Paris on Oct. 15.
LVMH has had its eye on Ghesquière for years, and had considered him to succeed Lee Alexander McQueen at Givenchy and, more recently, to follow John Galliano at the head of Dior.