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businessoffashion.comMarc Jacobs’ Future at Louis Vuitton in Doubt
PARIS, France — Marc Jacobs may be on the verge of leaving Louis Vuitton when his contract ends next month as designer’s future at the French luxury brand remains unresolved, an industry source told Reuters.
Since joining the group in 1997 Jacobs has steered Vuitton’s growth into a global luxury brand which generates nearly 7 billion euros ($9.46 billion) of revenues a year and more than half of parent LVMH’s operating profits.
“His contract may not be renewed,” the source told Reuters on condition of anonymity, without going into further detail. The French magazine Challenges this week said his departure had already been approved internally.
Marc Jacobs and Louis Vuitton declined to comment on Wednesday.
The potential move comes as the brand, famous for its LV-embossed canvas bags, is trying to regain some of its lost prestige, having failed to anticipate quickly enough consumers’ move away from logo-branded products, particularly in China.
Louis Vuitton’s sales growth has slowed down to 5-6 percent this year after decades of more than 10 percent annual sales growth, driven by an aggressive international expansion and demand in Asia, where it opened shops earlier than rivals.
Uncertainty about future growth at Louis Vuitton has been weighing on the stock price of LVMH shares which have gained 7 percent since the beginning of the year while the European luxury sector has gained more than 17 percent on average.
Marc Jacobs helped develop Louis Vuitton’s women and men’s ready-to-wear lines and runs his own eponymous brand which ranks among the most profitable smaller fashion subsidiaries within LVMH, fuelled by demand in the United States and Japan.
The Marc Jacobs brand also launched in August a cosmetics products line in the United States, exclusively distributed by Sephora, LVMH’s beauty products retail chain.
“Nothing has been decided yet,” a separate industry source told Reuters about Jacobs’ contract.
On Tuesday Louis Vuitton announced it had hired Proenza Schouler accessories designer Darren Spaziani as part of its upmarket drive and efforts to beef up its high-end offering of leather bags.
Earlier this month, signs emerged that Louis Vuitton’s revamp could be yielding results as the brand’s new bags have been flying off the shelves since their summer launch, according to a Reuters survey of shops in Milan, Paris and London.
Looking ahead, names in the hat to replace Marc Jacobs include that of Nicolas Ghesquiere, a darling of fashion editors, who left Balenciaga last year after having successfully infused new life into the Kering fashion brand.
Ghesquiere is regarded as close to Delphine Arnault, Louis Vuitton’s deputy chief executive and one of LVMH’s main talent-spotters. She is also the eldest child of Bernard Arnault, founder and chief executive of LVMH and France’s richest man.
Industry sources said it was possible that Marc Jacobs’s fashion show on October 2, as part of Paris Fashion Week, could be his last.
Jacobs introduced collaborations with famous artists such as Richard Prince, Takashi Murakami and Stephen Sprouse to help make Louis Vuitton bags more relevant to fashion followers.
“Marc Jacbos has done fantastic work at Vuitton but I think that today we need to reframe the leather goods and fashion proposition which has until now mainly been focused on the bags,” a luxury goods expert said, declining to be named.
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Marc Jacobs to Close London Store and Other European Outposts
As other luxury brands scale up their direct-to-consumer channels, the struggling LVMH-owned fashion house will significantly shrink its European retail presence.
LONDON, United Kingdom — As other luxury brands shift their focus away from wholesale and scale up their direct-to-consumer channels, BoF has learned that Marc Jacobs is set to close its last remaining London store on Mayfair’s Mount Street. Other European retail outposts are to follow, multiple sources said. The details of which other stores will be closed are not yet known, although the LVMH-owned fashion house currently operates retail stores in Denmark, Italy, Norway and Luxembourg, according to its website. The Paris location on Rue Saint Honoré will remain open, according to sources familiar with the business.
A spokesperson for LVMH declined to comment on this story.
While Marc Jacobs will maintain a physical presence in London through its wholesale partnerships with multi-brand retailers including Selfridges and Harvey Nichols, the Mount Street closing is symbolic for the neighborhood. The area's transformation from Mayfair backwater to luxury ground zero, home to top brands like Céline and Balenciaga, was kicked off by the opening of Marc Jacobs in 2007.
The new closures are the latest in a string for the Marc Jacobs brand, which has, over the past four years, shut down all of its Marc by Marc Jacobs stores, as well as some main line Marc Jacobs locations. At present, Marc Jacobs' retail network consists of four Marc Jacobs stores, one Bookmarc bookstore and four outlet stores in the US, as well as international stores and outlets in countries including Japan, Malaysia and China.
The streamlining is part of a larger restructuring at the brand, which has endured losses since its founder and designer exited his post as women's artistic director of Louis Vuitton at the end of 2013. At the time, the Marc Jacobs label was said to be on track to spin off from parent company LVMH and complete an initial public offering that would put it on par with Michael Kors.
During LVMH’s annual meeting in April 2014, chief executive Bernard Arnault said the Marc Jacobs business was generating a billion dollars a year in retail revenue, thought to include royalties from its partnership with Coty, which manufactures and distributes Marc Jacobs fragrances.
However, Marc Jacobs’ consolidated retail revenues, not including fragrance, have more than halved in the past three-to-four years, dropping from around $650 million to about $300 million, according to a source familiar with the business. (Industry analysts have also published similar estimates.) A significant proportion — from a quarter to a third — of Marc Jacobs' retail sales are generated by outlets, where the brand’s clothing and accessories are sold at a discount.
The drop in revenue can be traced to 2015, when LVMH announced its decision to unify Marc by Marc Jacobs and the main collection under a single brand umbrella, with British designer Luella Bartley and (accessories guru) Katie Hillier — who were hired in 2013 to craft a refreshed identity and product offering for the company's second line — leaving their posts. (Hillier continued to consult on accessories.)
Previously, Marc by Marc Jacobs’ bags, with price tags often under $500, allowed the brand to tap the then-growing demand for accessible luxury brands, competing with rivals such as Longchamp and Michael Kors. Launched in 2001, Marc by Marc Jacobs was once considered one the most profitable fashion subsidiaries of LVMH, enjoying strong demand in the United States and Japan. The line once accounted for about 80 percent of the brand’s revenue, according to analyst estimates. Collapsing the mid-range and high-end labels seemed to have confused consumers.
The brand unification has resulted in store closures both Stateside and in Europe, including several on Bleecker Street in New York, the brand's Bookmarc outpost on Melrose Place in West Hollywood and a Marc by Marc Jacobs store on London's South Audley Street.
However, the closure of the London flagship indicates deeper problems within the business that go beyond the restructuring. For the past two seasons, Jacobs has completely stripped back his once-elaborate runway shows, presenting at the Park Avenue Armory, where he has used the bare wooden floor as the catwalk and school-assembly-style folding chairs for seating. The approach was couched in the press as a creative decision, but is also a way of cutting costs.
Chief executive Eric Marechalle, who joined from Kenzo in July, replacing Sebastian Suhl, has been tasked with bringing back some "fun" into the brand, according to a source. Marechalle was the business brains behind the successful revamp of Kenzo, which he ran alongside co-creative directors Carol Lim and Humberto Leon. Marc Jacobs Beauty, which is part of the LVMH-controlled incubator Kendo, and its fragrance line continue to generate significant revenues.
LVMH has an 80 percent stake in Marc Jacobs. The rest of the company remains in the hands of the designer and his business partner Robert Duffy. Ownership of the brand's trademark is equally split between the group, Jacobs and Duffy.
Thank you so much. I guess the "Love" or "Iove" moniker appearing in the post text was actually a term of endearment.John Reinhold. Art collector and diamond dealer, and from what I understand just a New York fixture - part of Andy Warhol's cohort.
Random thought: What if Miuccia ditched Raf and brought on Marc as her co-creative director at Prada? Marc has always been open about his admiration for Miuccia, and for a long time there was this amusing sort of interplay between their collections, especially during the early 2010s. Seeing that his mainline is touch-and-go and Heaven is basically just Y2K-heavy licensing deals, it would be incredible to see him tap back into that nostalgic minimalist sportswear look that he seemingly promised to return to with F/W 2020. I feel like he could also help inject Prada with a romanticism and a genuine sense of humor again, two things that seemingly escape Raf...
Marc is an open and enthusiastic Miuccia fanboy but I can't see this working any better than Raf, for the opposite reason - where Raf can be a touch too sterile, Marc has the humour but and I'm not sure he can nail that rarefied air that's a classic Prada trait. Raf has that but lacks the humour (and I think the theory is that Miuccia is meant to balance that).Yes. I’d rather have Marc at Prada. He has the knack for merchandising which they desperately cling to but without the heavy handedness that descended to the Prada collections of late. You could be intellectual but fun. Prada used to be fun. Now it’s a bit too sterile.