PARIS — Could Proenza Schouler be the next buzzy young brand to end up in Bernard Arnault’s sprawling luxury empire?

This story first appeared in the August 26, 2014 issue of WWD. Subscribe Today.

According to market sources, LVMH Moët Hennessy Louis Vuitton has held talks about acquiring a stake in the New York-based fashion house. It’s understood discussions involve the 40 percent stake of Proenza Schouler that Andrew Rosen, John Howard and other investors jointly acquired in 2011 from Valentino Fashion Group.

The likelihood of a deal could not immediately be learned. It is not clear whether the founding designers might be willing to cede their majority control in order to partner with the luxury goods giant.

A spokesman for LVMH had no comment, while a spokesman for Proenza Schouler did not respond to a request for comment.

LVMH and its competitors have recently stepped up the pace of investments in young designers. Last year, LVMH sealed deals for a 52 percent stake in footwear firm Nicholas Kirkwood and a 46 percent holding in London-based fashion house J.W. Anderson, whose designer, Jonathan Anderson, is also creative director of LVMH-owned leather goods house Loewe.

Meanwhile, rival Kering acquired stakes in London designer Christopher Kane and American designer firm Altuzarra, helmed by Joseph Altuzarra.

Proenza Schouler has certainly been on LVMH’s radar for some time. Last July, the Left Bank department store it controls, Le Bon Marché, opened a Proenza Schouler corner. And earlier this year, the retailer hosted a vast, ground-floor retrospective exhibit of 80 favorite looks of Proenza Schouler designers Jack McCollough and Lazaro Hernandez.

“I love what they do. They have an amazing talent — just look at the fabrics,” Delphine Arnault, the daughter of LVMH chairman and chief executive officer Bernard Arnault, and executive vice president at Louis Vuitton, said at a cocktail party when the exhibit opened last February.

“We’ve been following their work for a while,” the executive said at the time, sidestepping questions about a possible business interest in the brand.

According to sources, McCollough and Hernandez were approached about designing Givenchy a decade ago — before that house settled on Riccardo Tisci in 2005. The current talks with Proenza Schouler, which one source characterized as being at an advanced stage, come at a time when the French group is putting a greater focus on the American market, having just named a new ceo for Marc Jacobs International, and plotting a new business strategy for Donna Karan International.

Proenza Schouler is seen as a scalable business with international resonance that could benefit from LVMH’s expertise in leather goods and global retailing.

According to sources, Rosen may be willing to give up the stake in Proenza to focus on the contemporary businesses Theory, Helmut Lang and J Brand, part of the Link Theory subsidiary of Japanese fashion giant Fast Retailing Co. Ltd.

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While best known for its megaluxury properties, headlined by Vuitton and Fendi, LVMH has a history of investing in smaller brands, dating back to 1997 when it invested in Marc Jacobs’ business, and hired him as artistic director of Vuitton. LVMH also held talks in recent years with Rodarte about investing in the label founded by California sisters Laura and Kate Mulleavy in 2005, but never concluded a deal.

Hernandez and McCollough have been darlings of the New York fashion scene practically since launching the label based on their mothers’ maiden names in 2002 at age 23. Named CFDA Womenswear Designer of the Year three times, the designers were also the first recipients of the CFDA/Vogue Fashion Fund in 2004.

The designers recently inked a license for swimwear, and made their first steps into retail, opening an uptown Manhattan boutique in 2012 and a flagship in the SoHo neighborhood last year.

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