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PARIS — With the acquisition of Gant complete, Maus Frères chief executive Guy Latourette is mapping out a strategy to grow the Swedish sportswear company into a global player.
This story first appeared in the February 13, 2008 issue of WWD. Subscribe Today.
In an interview, Latourette said Maus plans to propel Gant, mostly anchored in Europe, into the international spotlight by bulking up business in Japan, France and eventually the United States, with priority given to the former two countries.
“I like Gant a lot,” said Latourette, who also runs French sportswear brand Lacoste for Maus, Switzerland’s largest privately held retail group. “It reaches a segment of the market that is close to Lacoste — affordable luxury. The potential is great.”
Maus had been pushing Latourette to buy another brand it could grow using its logistical and management expertise. In 2003, Latourette led Maus in its acquisition of French outdoor brand Aigle.
Latourette said Gant was on his radar for a couple of years. His interest gained momentum and contact with Gant chairman Lennart Björk was made in early 2007. Maus put a concrete offer on the table for Gant to Björk last fall.
Björk spurned the deal, though, prompting Maus to launch a hostile bid that valued Gant at 5.2 billion Swedish kronor, or $799 million at current exchange. Björk continued to resist, but his defiance didn’t stop Maus from accumulating a controlling stake in Gant by mid-January.
Late last month a deal was finally reached with Björk and other shareholders to tender their shares to Maus for a sweetened offer of 320 kronor, or $49.17, a share. Maus now holds 96 percent of Gant, which runs 350 boutiques and had sales last year of about 800 million euros, or $1.17 billion.
Latourette said a squeeze out for the remaining Gant shares is under way and that Maus plans to delist Gant from the Stockholm Stock Exchange in the coming months. Björk agreed to remain on as chairman of Gant, a move Latourette applauded as vital to plans to elevate Gant’s profile.
“Björk is a remarkable man,” said Latourette, who noted the company would remain headquartered in Stockholm and that it would continue to operate in most European countries according to a master franchise strategy instituted by Björk.
In 1999, Björk, with a group of investors, bought the global rights to Gant, which was founded in America, with the help of private equity firms 3i and L Capital. L Capital, which is owned by LVMH Moët Hennessy Louis Vuitton chief Bernard Arnault, and 3i cashed out when Gant was listed on the stock market in 2006.
Latourette said Gant today was clean in terms of positioning, product and store design and marketing. The main challenge would be to grow Gant methodically into the markets from which it is absent. Latourette said Japan was the first priority, along with France — the only European country in which Gant is underrepresented.
Taking Lacoste as the yardstick for what Gant may be able to accomplish in Japan, he said the French brand improved sales in Japan from 6 billion yen to 10 billion yen, or $93.1 million, in the last five years as it opened more boutiques and better positioned its products. Currently, Lacoste operates 35 shops in Japan. Last year, Lacoste sales in Japan advanced 16 percent in yen as the firm inaugurated another five shops.
Latourette said his goal for Lacoste was to make Japan into a 15 billion yen business, or about $140 million.
“When you are strong in Japan, you can be strong in the rest of Asia,” he said. “Countries like China and Korea look to Japan for the trends.
“It’s similar to being strong in the United States,” he added. “It makes your business good in Argentina, Mexico and Canada. It’s a question of credibility. They are two countries that set the tone.”
Latourette said Maus, which acquired complete control of Lacoste through its French Devanlay subsidiary in 1999, would postpone the rollout of Gant in the U.S. due to the complicated nature of the market there. Gant’s success in the U.S. would necessitate important investments, new supply chain management and adaptation of the product to U.S. consumers, explained Latourette.
“We couldn’t [expand Gant in the U.S.] with the franchise model,” said Latourette, who added Gant’s growth in America was a 10-year project.
Ironically, he said both Gant and Lacoste’s business in America crumbled when both belonged to Crystal Brands Inc., which sold the brands to Phillips-Van Heusen in the Nineties. PVH sold Lacoste to Devanlay in 1999, the same year it divested Gant to Björk and his partners.
Maus started turning around Lacoste in the U.S. with a vast reorganization of global supply chains, retooling collections and reinvigorating the image. In 1999, Lacoste had sales of $25 million in the U.S., with $5 million in losses. Last year, Lacoste’s sales in America topped $200 million, making the country the brand’s single biggest market.
“It took three years [of restructuring] before we saw any results,” said Latourette.
In 1999, 70 percent of Lacoste products were made in France. Today, with factories in Romania, Tunisia, Morocco, Shanghai and Peru, only 7 percent of Lacoste’s products are made in France.
Latourette said Lacoste is hardly finished growing. The brand’s clothing sales last year topped 1 billion euros, or $1.46 billion, an increase of about 10 percent. The company opened its 1,000th shop in 2007. Another 10 boutiques are slated to open this year in the United States, bringing the total there to 65.
“Our priorities for Lacoste are to consolidate the U.S. business, continue to grow in Japan and to diversify the line while making it younger,” said Latourette. He said Lacoste would also attack South America, especially Brazil.
Asked if Maus was in the market to buy other brands, Latourette said: “We still have to digest this one. We have a lot of work ahead of us.”