PARIS — A fashion giant is taking up permanent residence in the burgeoning masstige zone — and the exploding world of e-commerce, too.

This story first appeared in the September 8, 2010 issue of WWD. Subscribe Today.

Karl Lagerfeld said Tuesday he will not show his signature collection during Paris Fashion Week and is instead preparing a new masstige ready-to-wear range to be sold primarily online.

Lagerfeld had been scheduled to show here on Oct. 3.

“I wanted this for a long time,” Lagerfeld told WWD. “I prefer to work in another way. I can’t compete with Chanel. I don’t want to be the poor child of myself. This has been my vision for years.”

Lagerfeld said the new collection would be primarily women’s wear but would have a few pieces for men as well. “It will be something affordable for lots of people,” he explained, adding the collection will cover sportswear, jeans, “everything.”

“We think there is great potential with this positioning, so we are very supportive and very excited,” said Christian Stahl, a New York-based partner in Apax Partners, owner of Karl Lagerfeld SAS. “He is such a global personality; this is going to be a global approach.”

Stahl declined to give sales projections, but also stressed that Lagerfeld’s wish has long been to reach a “broader audience rather than just the peak collection business.”

Lagerfeld’s signature collection, produced and distributed by Italian manufacturer Vaprio Stile since 2008, was made up of the runway line as well as a more commercial collection for the showroom in which Lagerfeld was less involved. That collection will now take a more commercial tack, according to a spokeswoman for Lagerfeld, who said it will continue to be sold in showrooms during fashion weeks in Milan and Paris, including this season.

Stahl did not rule out a return to the runway for the brand, either for the repositioned collection line or the forthcoming lower-priced range.

Meanwhile, Lagerfeld plans to pour his creative energies into his new line, based on the idea of “mass elitism.”

“I feel that it is almost a duty to do this with my name: it’s the way to modernity,” Lagerfeld stated.

The Lagerfeld company said negotiations are under way “for the distribution and production of the designer’s new vision.” The new line is expected to be ready for the fall 2011 season.

It is understood Apax is talking to several possible partners, but declined to identify them.

Stahl said the masstige business would be owned and operated by Apax, with production outsourced and distribution achieved primarily via e-commerce, complemented by selective wholesale with retail partners. The name, pricing and scope of the collection have yet to be finalized.

Lagerfeld helped ignite the masstige movement in 2004 when he partnered with Swedish fashion giant H&M on a one-time collaboration that sold out within hours in some 800 stores. The 30-piece collection ranged from men’s suits and jeans to chiffon cocktail dresses and sequin-pavéd jackets for women.

“My dream is to do very expensive lines like Chanel and Fendi and very inexpensive things,” he told WWD at the time. “I don’t believe in anything in between….Today people wear T-shirts and jeans with exceptional things.”

News of the masstige venture comes less than six months after the Lagerfeld company was left out of the monster deal that saw Phillips-Van Heusen Corp. acquire Tommy Hilfiger BV and certain affiliated companies from funds affiliated with Apax Partners LP.

Initially, there were big plans for the Lagerfeld business, which Hilfiger purchased in January 2005 for an estimated $30 million.

Hilfiger moved quickly to build the Lagerfeld business, staging a major fashion show in New York, and launching a contemporary Lagerfeld collection. But after Hilfiger was sold to Apax in 2006 and taken private, there was some major cost cutting, and among the casualties was Lagerfeld’s New York operation. Lagerfeld’s business was transferred to his Paris office. As a result, the Karl Lagerfeld women’s and men’s contemporary collection was discontinued following its fall 2006 retail debut, and 25 jobs were eliminated. Lagerfeld’s global licensing continued to be managed by Hilfiger’s licensing organization.

Besides the Vaprio-produced collection, Lagerfeld’s businesses consist of a men’s collection, licensed to F.D. Fashion Design in Germany; Karl Lagerfeld Eyewear, licensed to Marchon Eyewear, and Karl Lagerfeld fragrance and beauty, licensed to Coty Inc.

The K by Karl Lagerfeld denim line, a project under Hilfiger’s auspices, was discontinued last year.

Hilfiger executives have said Lagerfeld’s designer collection does a few million dollars a year, and Lagerfeld men’s wear does around $20 million.

On Tuesday, Stahl said there would be changes in management, which had been hinted at earlier this year, and no immediate plans to off-load Lagerfeld.

“We’re not selling the company now,” he said.

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