ON THE PROWL: Less than two years after shelving plans to sell Agent Provocateur following a strategic review, 3i is again on the hunt for an investor — or an outright buyer — for the luxury lingerie brand, which has fallen on hard times.
According to industry sources, 3i has begun talking to potential investors, including trade buyers, high-net-worth individuals and sovereign wealth funds, to help breathe new life into the brand, which expanded its worldwide retail network just as luxury sales began to slow and big-spenders — including Russians — stopped traveling.
As reported in November, Agent Provocateur plans to shutter 30 percent of its retail network, reduce headcount at its headquarters by 30 percent and phase down its diffusion line, L’Agent, which is designed by sisters Penélope Cruz and Mónica Cruz Sánchez.
Private equity firm 3i, which acquired a majority stake in the racy lingerie brand in 2007, is also grappling with accounting irregularities at Agent Provocateur that made the company appear more successful than it was.
The company posted revenues of 62 million pounds, or $94.8 million at average exchange, and earnings before interest and taxes of 10 million pounds, or $15.3 million, for the year ended March 28, 2015. The company cannot file its latest accounts with Companies House, the official register of U.K. businesses, until the irregularities are sorted out.
In the meantime, 3i has hired investment bank Rothschild to handle a possible sale or fresh investment, while new chief executive officer Fabrizio Malverdi steadies the ship.
As reported, he plans to ramp up Agent Provocateur’s footprint in Asia and China, where it has a marginal presence, and offer the main line — which had only ever been sold through the brand’s own stores — to wholesalers starting with the fall collection. The brand has five fragrances with partners InterParfums.
Spokespeople from 3i, Agent Provocateur and Rothschild have all declined to comment.
Agent Provocateur has 111 stores in 29 countries and is sold via Net-a-porter.com. When 3i bought Agent in 2007, it had 15 stores. In November, Malverdi said freestanding stores and concessions, mostly in the U.S. and Europe, would shut while the main line’s entry-level prices would be reduced.
In mid-2014, 3i had asked Goldman Sachs to conduct a strategic review and less than a year later decided to hang onto the business, with one source saying “there is still lots of growth to be had.”
Last November, 3i confirmed it would invest a further 4 million pounds, or $5.4 million, in Agent in the quarter to Sept. 30, 2016, and wrote down the value of its stake in the company by 39 million pounds, or $53 million, in the first half.