STROLL AND CHOU: GRAND PLANS FOR ASPREY
Byline: James Fallon
LONDON — Lawrence Stroll and Silas Chou want to make it “Breakfast at Asprey.”
Well, not quite. But the new owners of Asprey & Garrard see no reason why the British retailer can’t be as big as Tiffany. Stroll and Chou, who also own 19 percent of Tommy Hilfiger Corp., last week bought the jeweler and luxury goods chain from the Brunei Investment Agency for an undisclosed sum — although industry observers estimated it at less than $152 million.
Now the team aims to give Asprey a polish and roll it out.
“That’s what it should be but at a higher level,” Lawrence Stroll said in an exclusive interview with WWD the day after the deal closed. “There’s no greater luxury than British luxury and no greater British name than Asprey & Garrard. It just needs a little bit of luster restored and ownership and management direction.”
Stroll and Chou, who each own 50 percent of the company, plan to spare no expense in restoring Asprey’s sheen. Stroll stressed their plans are preliminary but admitted the duo plans to invest “tens and tens and tens of millions of dollars” in Asprey.
“First we’re going to improve the existing stores here and in New York — their products, their advertising and their marketing,” Stroll said. “It’s then our objective to open more stores. There should be an Asprey in every major city in the world.”
The new owners plan to step up Asprey’s product design program, especially in such areas as fine jewelry, watches, pens and other small accessories. “How foolish is it that there isn’t an Asprey watch? An Asprey pen? An Asprey lighter?” Stroll said in disbelief. “We plan to correct that. We have the greatest silversmiths right here on site and a leather shop still on the premises. No one else on Bond Street has these types of craftsmen on their premises and we should be making a bigger deal of them.”
Stroll has been a fan of Asprey ever since he first arrived in London in the early Eighties when he and Chou owned the western European license for Polo Ralph Lauren (which they sold in 1989). He talks enthusiastically about its 300-year history and the aura of its Bond Street premises. His plan now is to replicate that feeling in other Asprey stores around the world. And it will always remain Asprey — there are no plans to wholesale the company’s collections, which include tableware, antiques and silver as well as jewelry, watches and leathergoods.
The process of change will be a rapid one. The new management systems and products should be in place within the next 12 to 18 months, during which time the company will look for additional sites. Stroll said there should be new Aspreys opening by 2002.
The purchase represents a further collaboration for Stroll and Chou, who have been in business together for the last 20 years. It follows their aborted talks about buying Calvin Klein earlier this year, which ended over disagreements about Klein’s $1 billion-plus price tag. But Stroll stressed the Asprey purchase doesn’t represent the start of a buying spree by the duo. Nor does it indicate they are scaling back their involvement at their key holding — Tommy Hilfiger.
“We are still co-chairmen at Tommy and are not diluting our time allotment there,” he said. “Nothing could be further from the truth. We remain as committed to our duties at Tommy as ever.
“But Silas and I own a lot of things other than Tommy and Asprey; they’re just not as high profile. We don’t have any other purchases in mind at the moment but I’m not saying that if a great opportunity came along we wouldn’t take advantage of it. Do we want to be a major luxury goods group? Well, there are no plans to be but maybe in 10 years’ time that’s what we end up being.”
For now the priority is Asprey — and, of course, fixing the problems at Hilfiger (see related story this page). Stroll doesn’t hesitate to discuss the years of neglect that Asprey suffered under its former absentee owners, describing it as “an unorthodox set of circumstances.”
The Asprey Group was acquired in 1995 by Prince Jefri of Brunei, the younger brother of the sultan, for $370.9 million, even though its assets were valued at only $221.9 million at that time. Asprey & Garrard’s most recent accounts, for the year ending March 27, 1999, showed its net asset value had slipped to $76 million. The company had net losses of $152.4 million on sales of continuing operations of $75 million in fiscal 1999, which compares with net losses of $59.4 million on sales of continuing operations of $166.7 million a year earlier.
The prince and his family were Asprey’s largest single customers, accounting for sales of $106.4 million in 1997 alone. When he acquired the group it also owned a string of other companies including Garrard; Mappin & Webb; Watches of Switzerland, and designer Tomasz Starzewski. Prince Jefri claimed he wanted to turn Asprey into one of the world’s largest luxury goods groups, but he never invested significantly to expand the companies. The last two years have seen constant restructuring. Asprey was merged with Garrard in 1998 and the other subsidiaries were sold.
Last September it appointed a new chief executive, Robert Procop, who will remain ceo. Procop already has instituted changes at Asprey, including the further trimming of its cost base, the remodeling of its ground floor leather room, the installation of a new design studio and museum and the move of the crown jeweler David Thomas from a back office to an office on the ground floor. The ceo said Asprey should move back into the black this year.
He’s also begun developing an Asprey watch and more Asprey-branded jewelry, such as the patented Eternal diamond cut introduced last year for the millennium. “My goal in the next few years is to have all the diamonds we sell be the Eternal cut and branded Asprey,” Procop said.
Stroll said he and Chou had seriously considered buying Asprey since 1997. Industry observers expressed surprise the duo was able to grab Asprey, pointing out that it is the kind of brand such companies as LVMH and Gucci would be keen to own. Stroll said the purchase was eased by the change in the retailer’s ownership — the Sultan of Brunei wrested control of Asprey from the prince in May as part of a settlement of the prince’s massive debts.
“Once all the parties agreed — and it was an incredibly complex set of circumstances that required endless negotiations with the royal family and the investment agency — then the deal came together very quickly,” Stroll said.
“Now we can blow the dust off of Asprey and move it forward,” he added. “We’re over the moon to own such a brand and we won’t be floating it or selling it. No, now that we have it, we’re keeping it forever.”