Byline: Godfrey Deeny

PARIS--Two years ago, the smart money in Paris said that Christian Lacroix's days were numbered. His debut perfume, C'est la Vie!, was a disaster, his signature ready-to-wear collection was losing accounts and couture losses were bleeding his house dry. Increasingly, people began to ask the previously unthinkable: When would Lacroix's financier Bernard Arnault pull the plug? Not this year, apparently. According to Lacroix president Robert Bensoussan, Arnault has given the house until the end of 1996 to break even.
But Lacroix may be in better shape now than it has ever been, commercially. Its operating losses are reportedly down below $4 million annually, the lowest since opening in 1987. And recent business developments appear to give the house a fair shot at making Arnault's deadline.
First, the house's Bazar diffusion collection has been a much-needed commercial success and now retails in over 500 doors worldwide. Also, the signature line has won back clients, and new licensing deals are bringing in much needed revenue. And last week the house closed a deal with Gilmar of Italy to launch a Lacroix jeans line for the spring '96 season.
"No French designer has done this, and we believe that Christian has something to say in this area," said Bensoussan. "It will be a bright collection, with lots of details and prints."
He sees Jeans de Christian Lacroix in the same range as Versace Jeans Couture--which in France alone is believed to do about $8 million (40 million francs) a year at retail --and predicts that the line will be in around 1,000 stores by the end of 1999, with jeans priced at about $120 a pair. "As we have a very high image in couture, we can afford to move down in the jeans," said Bensoussan. Paolo Gerani, whose family owns Gilmar, expects wholesale sales to top $16 million (30 billion lire) in 1998, or about 300,000 pairs of women's jeans. Men's jeans will debut one year after the women's. "Christian Lacroix is a great opportunity. We believe that his jeans line can be very important," Gerani said. A key element in Bensoussan's recovery strategy has been to separate the creation and distribution of Lacroix's different apparel collections. The signature line is licensed to Mendes, the top-quality apparel maker that also manufactures Yves Saint Laurent's Rive Gauche. Bazar is sourced from the Loire Valley plant of Paciflor, a division of Kenzo, a stablemate of Lacroix in the LVMH Mot Hennessy Louis Vuitton luxury conglomerate controlled by Arnault.
A key reason for choosing Paciflor was "to prevent Bazar looking like the top line," a not infrequent problem with diffusion lines, Bensoussan said, adding that "Bazar hasn't eaten into the potential of our top line."
Bazar now retails in 505 sales points internationally, including 75 in the U.S., where it boasts clients such as Neiman Marcus, Nordstrom, Saks Fifth Avenue and many specialty stores. "Bazar is in 25 of our stores. We introduced it initially in 15 stores, and it had such a successful response we decided to increase its distribution," said Rosemarie Bravo, president of Saks. "They are happy clothes. We are very pleased with how it has performed," she added.
This year, Bensoussan expects Bazar to top $24 million (120 million francs) in wholesale turnover, almost as much as the signature collection. Sales of Lacroix's top line have advanced 25 percent in each of the past two seasons, he claims. It is sold in 150 sales points worldwide, and boasts 25 boutiques, including store-in-stores in Japan, where another LVMH powerhouse, Louis Vuitton, is in charge of distribution. In the U.S. the top line is in Neiman Marcus, Saks and Barneys, although Barneys does "buy it in a special way," according to Bensoussan: all in black. "We have definitely developed a clientele," said Bravo.
In the wake of Lacroix's successful January couture collection, business surged 40 percent. But last year couture losses topped $4 million. "I can't see how any other couture house can lose much less," he reasoned. "All divisions are making money, except for couture. There remains the problem that after you make money, is it enough to recoup the couture losses?"
Not at Lacroix right now. Sales are growing, though; Lacroix had a 20 percent increase in consolidated sales last year to just over $40 million (200 million francs), and this year Bensoussan expects sales to reach $60 million (300 million francs). The relationship between Arnault and Christian Lacroix has been uneven, but in his most recent comments on Lacroix, Arnault told a meeting of analysts in March that he thinks the house will turn a profit in 1996. "Christian Lacroix is one of the most dynamic designers around. Our investment is a wise one and will one day be seen as having been very good for the group," Arnault said.
Although Lacroix's debut scent ran up losses of $30 million before it was canceled, he'll try again, probably in a deal with Kenzo, who has a $70 million scent business. But the house is not banking on scent to save it. "Mr. Arnault has given me until 1996 to break even, and I'd like to do it without the perfume," says Bensoussan. "Let's remember he gave me time to do all this. That has to be respected," Bensoussan added. "When many people thought maybe we should close down, he decided to keep going."

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