PAUL SMITH CONSIDERS ITS STRATEGIC OPTIONS
Byline: Miles Socha
PARIS — Is Paul Smith up for sale?
Addressing intensifying speculation in the U.K. that his company is ripe for a transaction, the designer put out a statement acknowledging the possibility.
“In light of the consolidation trend in the luxury goods sector, Paul Smith reviews its strategic options on an ongoing basis, and frequently receives approaches from potential strategic partners,” it said. “None of these potential options has been developed to a stage that justifies further comment.”
Some reports suggested Smith had appointed investment bank Morgan Stanley Dean Witter to look at strategic options for the company, including an outright sale. A Paul Smith spokeswoman declined to comment in the report. Morgan Stanley had no comment.
Smith is on vacation and could not be reached for comment.
Certainly the company is in an expansion mode. As reported in WWD, Smith continues to have talks with many major luxury groups, including Gucci Group and LVMH Moet Hennessy Louis Vuitton. He is looking for a major company to initially take a minority stake to help him expand what he believes is still an underdeveloped business.
“We’re a very solid company,” Smith said in an interview this month. “We own all our own freeholds in the U.K., are immensely successful in Japan and have no debt. How many other designers can say that?”
Smith is the U.K.’s most successful designer, with sales at retail of about $275 million a year. He founded his company in 1970 with one shop in Nottingham, England. Today, it produces clothes for women, men and children, as well as accessories. His first signature fragrances will launch in September under a licensing agreement with Inter Parfums.
Smith’s women’s wear, which is produced via a licensing agreement with Onward Kashiyama in Japan, is barely sold in the U.S. at this point. Women’s apparel and accessories generate about 25 percent of overall revenues. He has a freestanding men’s store in New York and also wholesales the men’s wear. His women’s wear has a cult following among some celebrities, and starting this fall, Nordstrom will carry the women’s collection at its Chicago and Bellevue, Wash., stores.