Byline: James Fallon

LONDON — Belgian financier Albert Frere has bought 54 percent of the British retailer Joseph for an initial investment of $48.7 million.
The acquisition was announced Tuesday, and as in many fashion deals these days, it includes a link to LVMH Moet Hennessy Louis Vuitton. With the announcement of Frere’s majority stake in Joseph, it was disclosed that LV Capital, an affiliate of LVMH, will retain an unspecified minority stake in the company.
This was the first time that LVMH’s interest in Joseph has been disclosed. Also maintaining minority holdings in Joseph are the founder Joseph Ettedgui and his brother Franklin, the announcement from Frere said.
Frere, who last year linked up with his pal, LVMH chair-man Bernard Arnault, to buy Chateau Cheval Blanc, made the investment in Joseph through Compagnie Nationale a Portefeuille, his private holding group in Brussels.
The total purchase price eventually could reach $110.8 million depending on Joseph’s performance, Frere said in a statement. Dollar figures are converted from the euro at current exchange rates.
Frere, 73, a former scrap iron worker, is now one of Europe’s most influential financiers, despite his low profile. Through a company listed in Switzerland, he is the largest shareholder in French utilities giant Suez Lyonnaise des Eaux. He recently sold a stake in a Belgian insurance firm for a reported $465 million.
Joseph, which was founded by Joseph Ettedgui in London more than 25 years ago, is one of the U.K.’s leading designer retailers. Operating 18 stores in all, it has multidesigner stores in London, Paris, New York, Manchester, Leeds and Cannes. It also has stores that sell only the Joseph label pants in London, Paris, New York, Miami and Dusseldorf. It also wholesales its private label line to major stores such as Saks Fifth Avenue.
The company, which has been controlled by Ettedgui and his brothers Franklin and Maurice, has sales of about $72.5 million a year, 60 percent of which are in the U.K., Frere said.
Frere said in a statement that he wants to continue the development of the group and maintain its selective distribution. He could not be reached for further comment, and Joseph Ettedgui was returning from Paris Tuesday following the signing of the deal and could not be reached.
A spokeswoman for Joseph, however, confirmed details of the agreement.
The sale follows reports in May that Ettedgui was exploring ways to fund its growth. Franklin Ettedgui, who is Joseph’s financial director, told WWD at the time that the company had appointed an auditor to prepare a valuation. At that time, he said it would be at least a year before Joseph would decide on the next step.
A key to Joseph’s success over the last three years has been the opening of stores selling only the company’s own line of pants. The retailer has been eager to roll out the concept but has been constrained financially. Joseph also operates six stores in London carrying his full line of women’s and men’s wear as well as clothes by other designers; stores in Manchester and Leeds, and shops-in-stores in Harrods, Harvey Nichols, Fenwicks and Selfridges in London.
Although Ettedgui first made his mark as a retailer, his own collection began taking off in the mid-Eighties, and he built a solid business for it both in his own stores and at wholesale.
In a 1997 interview, he described his approach to his collection, noting, “We provide enough items to enable a good stylist and photographer to reinterpret them in any way they want.
“I’ve always considered myself a stylist, not a designer,” he said. “Stylists are what is driving fashion today, not designers with a big ego who say theirs is the only look.”
As a retailer, Ettedgui has been known for his early fostering of such designers as Azzedine Alaia, John Galliano and Rifat Ozbek. And the decor of his stores has been well copied. In the Eighties, its was black marble and chrome, and then in the Nineties he became tired of shops that looked too pristine and foreboding. Looking to provide an element of surprise, he redid the stores in the fall of 1996 installing mobile display units and hanging shelves rather than floor fixtures.
Earlier this year, Ettedgui bought the luxury retailer Connolly in London for an unspecified amount and has been working closely with his wife, Isi, Connolly’s creative director, on its development. Connolly currently has a store in Knightsbridge and has taken a site for a second unit in Conduit Street. The company sells its own line of women’s and men’s wear in cashmere, leather and suede, silk accessories and leather accessories using its own leathers.
Meanwhile, for Arnault, it was another day, another investment.
As reported, LVMH, in announcing stellar first-half results, disclosed that its Desfosses International media division was acquiring a stake in Video Networks Ltd., a London-based firm that provides video on demand and high-speed Internet access.
In recent years, as the industry became consumed with mergers and consolidation, LVMH has branched out from its main activities of fashion, leather goods and champagnes and spirits. And Arnault’s appetite for acquisitions has been varied and difficult to predict. In 1996, LVMH scooped up duty-free giant DFS and six months later acquired the Sephora perfumery, which is rolling out worldwide and beginning to reshape the landscape of beauty retailing.
More recently, Arnault ventured aggressively into cyberspace, with a $500 million investment in Europ@web, created from his personal holding company, Groupe Arnault. Since January, he has taken a strategic stake in about 20 online startups, to the tune of more than $100 million. They include the Swedish online sports apparel retailer He also has a $300 million share of Datek, the U.S. Internet investment house, and a $50 million stake in, the U.S. online pharmacy.
Arnault also surprised the beauty industry with purchases this year of three niche businesses: Bliss Spa, Hard Candy and BeneFit.