LVMH set to sell Lacroix label to US retailer for €2m
Saturday 08 January 2005
LVMH is in talks to sell its loss-making Christian Lacroix fashion house to a US consortium.
Almost two decades after Bernard Arnault, the chairman of LVHM, asked M. Lacroix to build up a bespoke couture house for the luxury goods giant, he has decided to cut his losses.
LVMH is on the verge of closing a deal to sell the fashion house to Falic Group, the Florida-based duty-free retailer, for about €2m (£1.4m).
Falic Group is run by three brothers, who are Americans of Israeli and Russian origin They own Duty Free Americas, which has 90 shops in US airports. Two years ago, LVMH offloaded two California-based cosmetics companies, Hard Candy and Urban Decay, to the brothers.
The move is part of the French company's strategy of paring back unprofitable offshoots to focus on its biggest brands such as Louis Vuitton and Christian Dior. The group has sold 25 brands over the past five years, trimming its luxury retail empire to 50 brands.
Under its new owners, Lacroix will continue to produce haute couture. The fashion house, which Mr Arnault put up for sale in August, has annual sales of €35m. Although the French group does not say how its individual brands perform, analysts believe Lacroix lost about €200,000 last year
A source close to LVMH said: "Mr Arnault lost patience with the couture house."
M. Lacroix is revered in the fashion world for his exuberant take on fashion. His fin de siècle designs are legendary as is his love of bright colours. He is happiest combing hot pinks, bright turquoise and fluorescent yellow - usually on the same jacket.
The fashion house started in 1987 and was an instant hit. Early reviews compared the buzz surrounding its first collection to the wave of publicity that Dior's New Look generated. It remains the only couture label that LVMH has built up from scratch. From its base in an 18th-century Parisian palace, it also produces ready-to-wear collections, jeans lines and household textiles.
The deal will not mean the end of LVMH's relationship with the couturier, who will remain as the head designer for Emilio Pucci, the Italian label controlled by LVMH.
Separately, LVMH said that it had completed its recent £330m purchase of Glenmorangie whisky. It plans to push the brand internationally through its global distribution network.
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