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Bronfman Family Takes A&G Stake

LONDON -- In less than a decade, he went from drinks baron to media and music mogul. Now, Edgar Bronfman Jr., who resigned as executive vice chairman of Vivendi Universal in December, is turning his sights to luxury goods.<P>The Edgar M. Bronfman...

LONDON — In less than a decade, he went from drinks baron to media and music mogul. Now, Edgar Bronfman Jr., who resigned as executive vice chairman of Vivendi Universal in December, is turning his sights to luxury goods.

The Edgar M. Bronfman family has taken a 40 percent stake in the London-based A&G Group, which controls the Asprey and Garrard brands, the company said Wednesday. Bronfman, who heads the family’s investment partnership, will become a co-chairman of A&G Group, along with Silas Chou and Lawrence Stroll, whose Sportswear Holdings Limited acquired Asprey & Garrard in July 2000.

“There are very few opportunities out there to take brands with this kind of stature, this kind of history and quality, and turn them into global businesses,” Bronfman said in an exclusive interview at the A&G headquarters here.

“I had a purely social relationship with Lawrence, and at the end of my time with Vivendi Universal, I saw him and he asked me what I was doing with my life. That’s how it started. I think the brands, partners and management here are great — it’s a compelling combination,” said Bronfman, who is one of the wealthiest men in the U.S.

Asked about the current dismal climate for luxury goods companies — and whether investing in luxury lifestyle brands was a good idea right now, Bronfman said: “Smart people invest when others are looking in another direction. This is a small business with great potential. It’s a business that will continue to grow over time. The ups and downs of the market are largely irrelevant to brands like these right now.”

Bronfman isn’t the only new face at A&G. The company also announced Wednesday that the Luxembourg-based Tag Group — a holding company and former owner of Tag Heuer watches — has taken a 10 percent stake in A&G.

Sportswear Holdings Ltd. will retain the remaining 50 percent. The partnership with the Bronfman family and Tag Group is a first for A&G. Last year, the company was in talks with LVMH Moet Hennessy Louis Vuitton about taking a minority stake, but Stroll said that never came to fruition.

“LVMH wasn’t exactly in an acquisitions mood at the time,” he said.

Stroll said he and Chou brought in the new shareholders to reinforce and accelerate the business plan for the brands. He said he was looking forward to the “brain power” the new partnerships would generate. “It’s about enriching our strategies,” he said.

There’s no question that Bronfman will be tapping his myriad Hollywood, music and media connections to help boost the brands when they launch over the next 18 months.

As reported, the aim is to build up Asprey and Garrard to compete with such luxury firms as Hermes, Louis Vuitton, Bulgari, Gucci and Tiffany — and eventually take A&G group public.

Asprey is billed as the more “authentic” British luxury lifestyle brand, while Garrard is considered the “classic avant-garde” jeweler. In the future, both brands will have their own watch lines — which the Tag group will, no doubt, help nurture.

Stroll said Bronfman’s and Tag’s shares are newly issued ones, and there are no plans to bring in any more partners. “This is not about selling, it’s about welcoming and bringing in new partners who share our vision and excitement,” he said. “Silas and I haven’t taken any money off the table.”

Stroll also denied that A&G was looking to raise last-minute funds for the project. “We’re going forward with the same investments as originally planned. There have been no changes,” he said, adding that about $200 million is being pumped into expanding the Asprey and Garrard brands.

The plan is for Asprey to open 10 stores by 2007 and 40 by 2012. For Garrard, the company plans two stores in London and New York by 2007 and 10 stores by 2012.

By 2012, the company aims to make Asprey a $400 million lifestyle brand and Garrard a $100 million jeweler.

Chou said the entry of the new partners will make A&G Group a truly global company. “All of the big brand names aspire to be global. But we’re truly global: I’m connected to the Far East, Edgar and Lawrence are tied to North America and Gianluca Brozzetti is European.”

Brozzetti, the former president of Louis Vuitton, is the chief executive of A&G. Asked how he viewed the launch later this year of another major jewelry brand — De Beers LV – — Brozzetti said he didn’t feel particularly threatened.

“On one hand, they are competitors. But on the other, what they are doing is creating a retail arm for the De Beers diamond brand. We are working on a different level, creating two lifestyle brands and targeting specific consumer groups,” he said.

In the fiscal year ended March 31, 2001 — the most recent available — Asprey & Garrard Group registered consolidated revenues of over $70 million, with two stores, in London and New York, and a showroom in Beverly Hills.”