PARIS — The economic destruction of the coronavirus crisis might be far from over, but rebuilding has begun in some parts — at Paule Ka, for example.
The chic, French ready-to-wear label has changed hands again and now belongs to Switzerland-based investor Matthias Thoma, a German national who brings three decades of financial experience to his foray into fashion.
“Any company is the same, it doesn’t really matter if you sell bread or fashion, at the end of the day there is a certain way of how you generate profit and generate loss and that part is no different than any other company I’ve been involved in in the past,” said the entrepreneur, speaking to WWD in his first interview about the purchase.
Thoma is familiar with the apparel industry having previously been married to a sportswear designer, which afforded him a view on design, wholesale, quality control, production supervision and merchandising,
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“I’ve seen a fair bit of it,” he said, even if Paule Ka is a “different type of fashion,” as he put it.
The company still has workshops and production is done in-house, which makes it closer to a haute couture operation than ready-to-wear, especially when it comes to quality, noted Thoma.
Thoma bought the label from Compagnie Marco Polo, the holding company of French entrepreneur Xavier Marie, who had acquired Paule Ka in 2017.
“This change of shareholder comes after two very difficult years,” the label said in a statement.
Thoma has presented his plans for the label — described as a “transition phase” — to its executive committee, works council and employees. The future strategy entails structuring collections around two lines, “La Femme Paule Ka” and a more youthful “Mademoiselle Ka.”
Marketing efforts will start with a focus on clients in their 40s to 60s, before adding engagement in more mainstream media based at a younger age group.
It is important for the label to remain faithful to its core clientele, noted Thoma, before bringing in new classes of consumers.
“You can add to them but you can’t tell your key followers that all of a sudden they have to buy completely different style,” he said. He describes the label having its own niche based on a very elegant style.
“We need to work with that niche, if we want to be successful we have to stay with that — we can’t just go and try to copy everybody else and hope that sells,” he said.
“Under the lockdown, I was lucky enough and smart enough, maybe, to close a lot of my investments in the financial markets and in all honestly I don’t have a lot of faith in how the financial markets right now are performing,” he said, noting that even if some financial services businesses are rising, it doesn’t make sense to him.
“If you don’t understand what the market is doing you shouldn’t be investing,” he said.
Looking into buying a business that produces something tangible, he quickly settled on Paule Ka.
“That’s where the future money is,” he said, referring to companies that produce something tangible.
“If you get something now for the right price that’s the right opportunity three four or five years from now these businesses could be worth more,” he said.
The executive met with employees who were enthusiastic, he said. He has rehired the former chief executive officer Alain Quillet for two weeks to help with a transition, and a new ceo will be announced at a later date.
Employee numbers, which are in the range of 150, will finish the year slightly higher than when he bought the company, the new owner predicted, although there will be some changes, he noted.
The label has creative directors who have been with the company for 14 or 15 years, he said, noting that institutional memory makes it more valuable.
“I was particularly happy with the design and the direction,” offered by the design teams, he said, referring to the direction not new, but actually old — reflecting the brand’s identity, which had strayed from its roots in recent years, he though.
Thoma seeks to return to the ideas of founder Serge Cajfinger, who established the brand over three decades ago.
“Everything you will see from August onward in the stores is much more in tune with what the original founder had envisioned,” he noted.
Financial details of the transaction were not disclosed. The deal was handled by M&A specialist Actoria SA.
Paule Ka has struggled in recent years and came close to bankruptcy before being purchased by Marie.
Marie, who made his fortune as founder and former ceo of furniture and home decor company Maisons du Monde, initially brought back the label’s founder Serge Cajfinger on a one-year contract to help improve the business, and then hired Maxime Simoëns to take over creative direction.
Marie had set about building a small fashion group, acquiring children’s clothing and homewares label Bonton in 2016 and shoe manufacturer Rautureau in 2017. Following his purchase of Paule Ka, his holding group Marco Polo added another children’s brand, Le Petit Souk, and cashmere specialist Eric Bompard to its portfolio.
Paule Ka’s annual turnover is around 36 million euros a year. It has 310 points of sale and is present in 34 countries with 72 stand-alone stores, including one on Madison Avenue in New York that Thoma plans to keep.