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PARIS — Karl Lagerfeld is out to build a signature business to match his outsize personality and towering fashion reputation.
This story first appeared in the October 24, 2011 issue of WWD. Subscribe Today.
That effort will ignite on Jan. 25, when the designer will launch into the masstige category and burgeoning e-commerce universe with his new rock ’n’ roll-flavored Karl collection.
The 100-piece women’s line — priced to retail from about 60 to 300 euros, or $95 to $450 — will make its debut on Net-a-porter via an exclusive global distribution partnership, with sales on karllagerfeld.com to come onstream Feb. 28.
A launch event is planned on Jan. 25 during Paris Couture Week, at which the designer will also unveil to the trade a new signature collection, Karl Lagerfeld Paris, to be produced and distributed under a licensing pact with Italy’s Ittierre SpA, with first deliveries for the fall-winter 2012 season.
Pier Paolo Righi, the new president of Karl Lagerfeld BV, disclosed the developments in an exclusive interview at the designer’s new Paris headquarters: An airy 19th-century town house tucked in a leafy courtyard off the Rue Saint-Guillaume on the Left Bank here.
While the varnish was still drying on the grand staircase’s coiling banister, Lagerfeld’s sketches for the new Paris line were already pinned to the wall, and Righi excitedly recounted a slew of projects — from pop-up Karl shops to “Karl Lagerfeld experience” flagship boutiques — designed to catapult the company into the big leagues.
The executive, who joined Lagerfeld in August from Tommy Hilfiger Corp., said sales of Lagerfeld branded products currently generate “north of 100 million euros,” or $137 million at current exchange, annually at retail.
“We would disappoint if we could not multiply that substantially,” he said. “We also think there is a big opportunity to drive the business with strategic alliances and partnerships.”
For example, Righi said he would soon unveil a global partnership for watches, and he said negotiations to license the innerwear category were under way.
But the affordable Karl line is the most crucial volley of the company, now controlled by private equity firm Apax Partners. As reported, the Karl Lagerfeld company, previously owned by Tommy Hilfiger, was not part of the deal last year that saw Hilfiger’s company acquired by Phillips-Van Heusen, now PVH Corp.
Righi flipped through a catalogue showing Dutch beauty Saskia de Brauw modeling a range of Karl looks, from silvery jeans and Perfecto-style vests to an elegant black cocktail dress with a plunging back, some of them accessorized à la Karl with fingerless gloves and detachable, demonstrative collars. He used the words “street” and “rock” to describe the brand’s fashion attitude. Although he defined the collection as “ageless,” it is mainly targeted at women in their late teens and early 20s with its preponderance of denim and leather.
To be produced in-house, and manufactured in Italy and Asia, the collection is to expand its accessories offering, which Righi reckons has the potential to “easily” account for more than half the label’s revenues.
He declined to provide specific targets, but said “such an Internet business for our brand, over the course of five years, definitely has the potential to be several tens of millions of euros.”
“It’s my today’s taste and style and a reflection of how I think a great number of people would like to be dressed now,” is how the designer described the collection.
The company plans to add a Karl men’s wear collection for fall 2012 retailing, and there will be a small wholesale component with about 20 high-visibility retailers invited to carry the Karl label. Righi declined to name them.
The company also plans to open several pop-up shops in major cities, including at least one in Paris, to bolster awareness of the project. This is to be followed by a network of permanent, freestanding stores, including some for the Karl label and “experience” boutiques showcasing the masstige and upscale collections blended together, along with ancillary categories Lagerfeld loves, such as books.
Righi said he’s aiming to open the first “experience” store in the second half of 2012, likely in Paris, with a rollout to follow in 2013.
However, he stressed that the masstige venture is designed to be primarily Web-based, as the designer is convinced it’s the main way to connect and communicate with today’s young generation.
“We believe in this collection based on Karl’s talent, his global appeal, and the product itself. We don’t share projections, but this has the potential to be an important business,” said Natalie Massenet, founder and executive chairman of The Net-a-Porter Group, calling Lagerfeld a master of “high-low” and lauding the positioning of the Karl label.
“It’s a very strong, well-edited collection with a great mix of street attitude and timeless chic. It also is an entire wardrobe that mixes and matches well with itself,” she said. “While it has great contemporary price points, it has enough edge to resonate with a sophisticated fashion consumer who is looking for great new items at any budget.”
Marketing efforts in support of the launch will primarily be Web-based, including a social media component, with more traditional print advertising planned for fall 2012.
Lagerfeld and his team worked with New York-based creative agency Laird + Partners to develop its “brand book,” a mostly visual document summarizing the designer’s essence: His obsession with the now; his broad cultural interests; his passion for photography and publishing.
His iconic and graphic profile — accentuated with sunglasses and a jutting ponytail — is even embedded in the “K” of his new label — and likely to be plastered over leather goods, T-shirts and underwear waistbands soon.
Laird also worked with the designer on his revamped Web site, which is to showcase Lagerfeld’s interests and activities, and animate the brand’s personality. Content is to range from insider views on photo shoots to Lagerfeld’s favorite exhibitions and addresses.
Righi declined to give projections for the Karl Lagerfeld Paris line, which will be targeted mainly at retailers in Europe, the Middle East, Russia, Asia and select department stores. “For North America, we will go to some select retailers in the key fashion cities,” he noted.
Prices for the premium line start where Karl ends, 300 euros, and run up to about 2,500 euros, or from $411 to $3,425 at current exchange. “It’s an affordable first line,” Righi said. He described the pact with Ittierre as long-term, with an initial five-year period during which the partners plan to build a “substantial” business.
Lagerfeld bristled at the term “affordable designer segment.”
“I don’t work in that direction. I just want not too expensive clothes that people may like and perhaps want to wear,” he said. “That was my concept for a long time, but my business partners in the past wanted to be like Chanel or Fendi without putting behind what is needed to be like that.
“It was only when Apax sold Hilfiger that they started to look at Lagerfeld with other eyes and started to invest, etc.,” he continued. “Now I am feeling we are ready for the right job — the way to do things right in a modern, unusual way.”
Righi spent a year and a half as Hilfiger’s general manager for Italy before joining Lagerfeld. Before that, he spent 10 years at Nike, most recently as general manager for Central Europe, Middle East and Africa.
Emblematic of his rapport with the designer, Righi’s official portrait was shot by Lagerfeld. “We share the same vision and the same idea of where we want to go,” Righi said. “It’s a new approach encapsulating everything Karl Lagerfeld stands for.”
He declined to say how much Apax was investing in the re-launch efforts, but said the shareholders have “resourced it accordingly,” allowing him to assemble teams in Paris, Amsterdam and New York. He enthused that Lagerfeld’s “engagement and involvement is really huge.”
“Karl Lagerfeld is essentially already a global brand, but without a global business and as such is truly unique,” said Christian Stahl, managing partner at Apax. “Under Karl’s unique creative leadership, married to a talented and experienced management team and on the basis of a well thought out and adequately funded business plan, the chance of success is very compelling.”
Despite his fame as the couturier at Chanel, and designer of furs and ready-to-wear at Fendi, Lagerfeld’s signature business has yet to achieve critical mass — and over the years has undergone a fair degree of turbulence and retrenchment.
In September 2010, Lagerfeld stopped showing his signature collection on the Paris runway, announcing plans to steer his brand towards “mass elitism,” given the popularity of his name.
Ongoing businesses include a Lagerfeld men’s line licensed to F.D. Fashion Design in Germany, eyewear with Italy’s Marchon, and fragrances with Coty Prestige, a division of Coty Inc., including the new Karleidoscope women’s fragrance, which bowed earlier this month exclusively in Sephora’s European doors.
Righi noted Lagerfeld, an innovator with collaborations and co-branding, would continue to do so on a selective basis, saying “no” to proposals more than “yes.”
He cited “extremely good” consumer reaction to recent forays, including tableware with Swedish crystal maker Orrefors, and high-end writing instruments with S.T. Dupont.
Lagerfeld’s best known tie-up is probably his 2004 one-off collection for Swedish high-street retailer Hennes & Mauritz, which helped ignite the masstige craze and unleashed pandemonium in the 800 stores where his 30-piece collection was shown.
“The awareness of the man, Karl Lagerfeld, and what he stands for is amazing. He’s the guru of fashion,” Righi enthused. “We are taking the essence of what is there and bringing it to life.”
The executive recently accompanied the designer on the personal appearance he did at Macy’s for the launch of a capsule collection there, and witnessed a crush of people — including teenage girls — clamoring to get a glimpse of him.
“If you see this, then you understand not only the strength of his personality, but also the potential of the brand,” he said.