PARIS — Will “Balmainia” — fanned by the French brand’s collaboration last November with fashion chain H&M — now spread to the investment community?
This story first appeared in the February 13, 2016 issue of WWD. Subscribe Today.
According to a Paris source, a mandate to explore a sale of the company has been given to Bucéphale Finance, a boutique mergers and investment firm in Paris founded by Jean Marc Forneri, who is also a director of Balmain SA and a shareholder in the fashion house.
Reached by WWD, Forneri declined all comment.
News of the company being in play was also reported Friday in French financial daily Les Echos, which pegged the company’s revenues at 120 million euros, or $134.8 million at current exchange rates.
A spokesman for Balmain said the house “does not comment on rumors.”
According to sources, Balmain received unsolicited approaches from private equity firms and Asian fashion players in recent months, which might have prompted the move to a more formal sale process.
Question marks about Balmain’s future ownership have hung over the house since December 2014 when Alain Hivelin, the majority owner of Balmain and the architect of its recent global expansion, died at age 71.
At the time, management said majority ownership passed to a family holding company, and that the company’s strong cash flow, and zero debt, would allow it to finance expansion without having to take on any additional partners.
It is understood Hivelin’s principal heirs, his wife and three daughters, are not involved in the fashion business, currently enjoying strong growth under creative director Olivier Rousteing, a darling on social media who has tight connections with the Kardashian clan and a gaggle of top models and actresses.
According to sources, several members of Balmain’s management board also own stakes, and not all wish to tender their shares as they pilot the company through a profitable expansion phase.
Key members of management include Emmanuel Diemoz, chief executive officer, and Jean-François Dehecq, chairman.
The company employs about 140 people and exports its fashions and fragrances to some 60 countries. Europe accounts for about 40 percent of Balmain’s business, Asia 30 percent and the Middle East and Russia the remaining 10 percent.
As of February this year, Balmain counted 19 directly owned stores, concentrated in China as well as in Tokyo, Seoul, Hong Kong and Dubai, although recent openings include London.
Data filed with the Paris commercial court shows Pierre Balmain SA posted 2014 revenues of 44.6 million euros, or $59.3 million at average exchange rates, and profits of 7.6 million euros, or $10.1 million.
Those figures capture only part of the company’s activities. One source noted that Balmain’s niche positioning — with its showy and sexy ready-to-wear commanding nosebleed prices — and its extensive licensing could prove barriers to attracting interest from Europe’s big luxury groups. However, cash-flush private equity funds would be likely to kick the tires of this trophy asset, as storied French couture houses are rare.
Pierre Balmain founded his Paris house in 1945 after design stints at Molyneux and Lucien Lelong, and became known for wearable, elegant clothes: safe and classic for day; extravagant for evening.
The late Oscar de la Renta was its last couturier, while subsequent designers, notably Christophe Decarnin, heated up the house with more audacious and racy styles, including strong-shouldered jackets, motorcycle jeans and heavily embellished minidresses. Rousteing has continued in the va-va-voom vein, also applying heavy embellishments to his flashy men’s wear.
The brand is seen having strong potential to expand its retail footprint, and capitalize on the buzz around the brand, fanned by Rousteing.