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LONDON — Silas Chou and Lawrence Stroll may not have drawn up the master plan for the Michael Kors business, but there’s no doubt the two partners have clear ideas about its future direction: Stroll has confirmed that Kors will quit as Celine’s creative director next year.
This story first appeared in the March 10, 2003 issue of WWD. Subscribe Today.
“We want him to focus on the Michael Kors business,” said Stroll in an exclusive interview in his office at the A&G Group headquarters here. “Michael will not continue with Celine past fall 2004. We’ve already agreed on that with LVMH [Moët Hennessy Louis Vuitton, which owns Celine].”
Stroll added: “There is no doubt in my mind that Michael Kors can and will become the next big American designer company. It’s a phenomenal opportunity for us, and we are very, very excited.”
As reported, Kors extended his contract with Celine until March 2004. Stroll’s statement, however, is the first official confirmation that Kors will give up his role within LVMH after that date.
“Michael had not intended to extend his contract, but LVMH asked him to,” a spokeswoman for the designer added on Saturday.
“Knowing what is ahead for his business in New York and the success he sees forthcoming, Michael is looking forward to focusing all his energy on his own collection and will not extend his contract past 2004,” she said. “If that could happen sooner than later, that would be fine with him.”
In January, Chou and Stroll purchased approximately 85 percent of the Michael Kors business through their company, Sportswear Holdings Limited. Financial sources said they paid just under $100 million, an amount roughly equivalent to the global volume of all Kors products.
Stroll, looking every inch the tycoon in a neat gray suit and puffing a fat cigar, would not be drawn on the specific details of the Kors business. Asked if the Kors business could reach the size of Tommy Hilfiger’s $1.88 billion empire, Stroll said no — and yes.
“That’s a difficult question to answer. Times are different, department store environments are different, and I don’t want to make individual comparisons with other companies. The business may not grow to be as big as Tommy Hilfiger in terms of volume, but in terms of market penetration and awareness, yes, it will be as big.”
Stroll said that while the master plan hasn’t been laid down, his and Chou’s priority for the business is to expand the collection and bridge businesses globally.
He said that, for the moment, he and Chou will preserve the status quo, which means that collection will continue to be manufactured in-house, and the Kors Michael Kors bridge collection will be produced under license by Onward Kashiyama.
“The bridge business has only been around for a few years, and to us it represents a huge, untapped potential,” Stroll said.
He added there were no plans to turn Michael Kors into a retail business. “This will continue to be a wholesale-driven business. Yes, we plan to open flagships in key cities, but most of the distribution will be through department stores.”
In terms of product launches, Stroll said he and Chou would “eventually” be looking at other product sectors. He said they are already thinking of producing a line of handbags in-house, but that there were no immediate plans to launch a jeans line.
“That’s not in the cards right now. There are already denim components in the collection and bridge lines,” he said.
The current economic climate, coupled with the threat of a war in Iraq and political tensions with North Korea, have not been a deterrent for Stroll and Chou. “Timing is everything. The Asprey, Garrard and Michael Kors brands are all in their infantile stages of life. For us, the next 10 to 15 years are going to be about growth, which means the economy will have less effect on us than on a more mature brand. In the case of Michael Kors, we’re starting from a very small base.”
Stroll denied a rumor making the rounds in New York that Michael Kors’ business was expecting to report losses of $4 million this year. “That’s just not true,” he said.
He also cut short speculation that Edgar Bronfman, the co-chairman and a 40 percent shareholder in A&G Group, may have become involved with the Kors business.
Bronfman was spotted in the front row of the Kors show in New York last month. “Edgar and his wife Clarissa are very dear, very old friends of mine. His wife also happens to be a very big Michael Kors customer. But Edgar has no role at Michael Kors.”