PARIS — Can investing in a fledgling fashion house reap profits?
A growing number of European investors think so, and they are starting to pump capital into young fashion brands. In France, investment bank Natexis Capital has created a fund called Mode et Finance to invest in young designers, while in Belgium, investor Anne Chapelle has purchased shareholdings in the young businesses of Haider Ackermann and Dirk Schonberger. She also holds a stake in Ann Demeulemeester's company.
Meanwhile, in the U.K., Imran Amed, a former consultant at McKinsey & Co., has assembled the first round of financing for a fund called Byesse that will buy into young fashion firms; the first investment is expected to be made later this year.
Giles Deacon, Anne-Valerie Hash, Christian Wijnants and Charles Anastase are among the young designers some think may attract this new group of investors.
The development is propitious for struggling talents, as the market has been challenging for independent fashion houses in the face of giant and well-capitalized conglomerates like LVMH Moët Hennessy Louis Vuitton and PPR, parent of Gucci Group.
Ackermann is a case in point. Just a few years ago, he was on the verge of closing, despite industry kudos — unable to scrape up enough money to produce a collection.
"It was a horrible period," he recalled over coffee at the Café de Flore here. "I was working day and night. I was loading and unloading boxes. It seemed funny at first, but doing everything yourself got old very fast."
Then the designer's fortunes reversed. He participated in the Gwand fashion festival in Switzerland and took the first prize of 100,000 euros, or about $128,000. Then Chapelle bought into his company.
Now the designer is on track, having moved from Antwerp, Belgium, to Paris, where he has assembled a new studio and feels fresh creative energy. Chapelle is banking on his business moving into the black within a year.
"It all happened at a very critical moment," said Ackermann. "I could show again. Even more than the money, which I needed desperately, it gave me confidence again."
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