MILAN — Helmut Lang’s new owner, Tokyo-based Link Theory Holdings Co. Ltd., has ambitious plans to revive the label on the contemporary level and is in the hunt for a designer to help make that happen.
On Friday, Prada Group agreed to sell the Helmut Lang brand to the Japanese company, which also owns the Theory business in Japan and in the U.S.
As for a designer, the company issued a warm appeal to the namesake Austrian who left his company last year, but it’s seen as a long shot for Lang to rejoin the label at this point. Nevertheless, its new owner seems favorably disposed to some kind of relationship. “[He’s] always welcome if Mr. Lang is interested in working with us,” Hidetsugu Onishi, Link Theory’s chief financial officer told WWD. “We hope that we can have a good relationship with him in the future.”
Onishi stressed that the company hasn’t decided on a designer yet, but he dropped a few clues. He said Link Theory prefers “younger talents” but declined to comment on a recent report that Alexandre Plokhov, designer of men’s wear line Cloak, was headed to the label. He also declined to say whether the company has been in contact with Helmut Lang himself.
Lang declined to comment on the sale of the company.
Neither Link Theory nor Prada is releasing a transaction price. Prada shuttered Helmut Lang in the wake of Lang’s departure last year. Link Theory is buying just the trademark name. One industry insider estimated that Link Theory paid no more than 30 million euros, or $36.3 million, for the brand.
The announcement confirms WWD’s report that Prada was nearing a sale to a Japanese company.
“We like that the brand is kind of clean without any negative assets,” said Onishi, whose company has been in contact with Prada for the last six months. He envisions the new Helmut Lang brand as a contemporary label, like Theory, rather than a luxury one. He declined to give a sales forecast.
Andrew Rosen, president of New York-based Theory, said he will run the Helmut Lang business initially and assemble a team and structure to position it for future growth. Helmut Lang will continue to be based in New York, though not in the brand’s original SoHo headquarters. Theory plans to move to new headquarters in the Meatpacking District before the end of this year, but Rosen said the Lang business will be located elsewhere. “Lang is a totally separate strategy from Theory, and it will have its own organization and identity,” Rosen said.
This story first appeared in the March 20, 2006 issue of WWD. Subscribe Today.
“This is clearly something that [Link Theory chief executive officer] Ricky Sasaki had found as an opportunity, and we had seen both Jil Sander and Helmut Lang but decided that, for our company, Helmut fit the best,” Rosen said. “Helmut is an amazing brand that has a 20-year legacy of being at the forefront of new innovations and ideas. Here is a company that has this incredible heritage and zero business — not a good store, and not a bad store, nothing. There’s a great opportunity to look at the heritage of the company and reshape it.”
The deal is expected to close at the end of this month.
Rosen wouldn’t comment on whether he or Link executives have held talks with Lang himself. “Helmut is one of the great talents of the world,” he would only allow. “There are many companies whose founders and creative visions are still there and who do a great job, and vice versa, they are no longer there and the business is terrific. I think it would be fantastic [for Helmut to return], but I don’t think it’s necessary.”
Onishi said his company has yet to outline a business plan for the brand in terms of investments and future store openings. He did say that a “very small” Helmut Lang collection of women’s and men’s apparel will bow for 2007. Distribution will kick off through a “very selective” ring of retailers.
Rosen added: “We have got to let the smoke clear, the dust settle and decide on these things.”
There is potential in many areas, from men’s and women’s sportswear to denim and accessories, as well as widening the range of price points, according to Rosen. “The possibilities are endless, but you have to build it brick by brick,” he said.
It’s not yet clear where the line will be produced, but Onishi said Link Theory’s U.S. production site “could be a first option.” Link Theory also has manufacturing facilities in Japan and sourcing partners in China and Europe.
The potential difficulties of reviving a frozen brand don’t appear to faze Link Theory. Onishi said Link Theory has the infrastructure in place to capitalize on Helmut Lang’s international name recognition. In November, Link Theory bolstered its market presence in Europe when it bought the fashion company Rosner. “The brand is well known. We like that part of the transaction,” Onishi said. Rosen is also well versed in building fashion business. He built Theory into one of the hottest contemporary brands with a wholesale volume approaching $400 million globally and is a partner in the Alice + Olivia collection.
Undoubtedly, Link Theory also likes the transition because it’s not assuming debts or other financial obligations related to Helmut Lang. In 2004, Prada had to account for 15 million euros, or $18.8 million, of devaluations on Helmut Lang. Despite Prada’s attempts to develop the brand worldwide, Helmut Lang’s sales declined through the years to 24.8 million euros in 2004 — the most recent figure available — from 46.3 million euros in 2001.
When asked about the nature of the negotiations with Prada, Onishi said: “This wasn’t an easy deal for anybody.”
Prada had been shopping around the Helmut Lang and Jil Sander businesses. Both houses had seen the departure of their founding designers and were losing money. Last month, Prada sold Jil Sander to equity group Change Capital for an undisclosed sum, effectively pruning the Prada group down to its Prada and Miu Miu businesses and niche labels Car Shoe and Azzedine Alaïa. Prada still retains a minority stake in shoemaker Church’s, which the company has told bankers it might sell.
“With [the Helmut Lang] transaction, the Prada Group completes the business plan announced at the end of 2005, aimed at focusing on its core brands. This allows the company to pursue the worldwide development of the Prada, Miu Miu, Car Shoe and Azzedine Alaïa brands,” Prada said in a statement.
Prada Group bought 51 percent of Lang in 1999 and the remainder in 2004 for undisclosed sums.
Fashion consultants were cautious to prophesize on the future of Helmut Lang. If Link Theory paid a low price, as expected, there’s less of a financial risk to relaunch the brand, some said, adding that much hinges on the choice of designer.
“The world is so full of brands that are abandoned or dusty, and it costs a lot less to buy one of these than invest in a new one altogether,” said Andrea Carrara, a partner at the Milan office of GEA consultancy. “Helmut Lang is [already] an international brand. Launching a brand and making it international takes years.”
Link Theory went public on the Tokyo stock exchange last summer. Its Theory business runs its own retail network and wholesale clients such as Saks Fifth Avenue and Bergdorf Goodman.
Since cofounding Theory in 1997, Rosen has been able to create one of the hottest contemporary brands in the market. The brand is known for its sleek, slim-cut suits, pants and shirts.
In January, Link Theory outlined an ambitious five-year plan to nearly triple its consolidated sales to 100 billion yen, or about $851.64 million, by 2010. Strategic objectives include expanding Theory in Europe, opening 30 stores in the U.S. and breaking into China.
The plan also called for Link Theory to pursue acquisitions “aggressively.” Onishi couldn’t be drawn out on other acquisition targets, stating that Link Theory is a publicly listed company.
“We are always open to opportunities,” he said.