PPR Buys Majority Stake In Christopher Kane

[Blackalicious]

By NADYA MASIDLOVER

PARIS—PPR SA PP.FR +1.24% said Tuesday it has acquired a majority stake in designer label Christopher Kane, as the French luxury giant maintains its fashion edge by buying into one of London's most sought after names.

The acquisition of a 51% stake in the Christopher Kane label highlights PPR's long-established strategy of investing in smaller high-end brands such as Stella McCartney and Alexander McQueen and nurturing their growth.

"This new partnership with Christopher Kane is a testament to our desire to work with and support new creative talent," said Alexis Babeau, managing director of PPR's luxury division on a call with journalists.

PPR, the owner of luxury houses such as Gucci and Bottega Veneta as well as Puma sportswear, didn't disclose the purchase price nor the annual revenue of the Christopher Kane brand, but said that the company was currently profitable.

The 30 year-old Scottish designer, who runs the business with his sister Tammy Kane, is one of the British fashion scene's rising stars. Over the past seven years, his collaborations have been as diverging as they have been high profile, earning him notoriety both in fashion's elite circles and among mainstream shoppers.

Since graduating from Central St. Martin's College in London and setting up his own brand in 2006, Mr. Kane has consulted for fashion icon Donatella Versace, designed a capsule collection for high-street chain Topshop and worked with the crystal maker Swarovski and the Shiseido 4911.TO +0.71% cosmetics brand.

Last year, Mr. Kane was one of three nominees for the British Fashion Awards designer of the year, along with PPR's Stella McCartney, who won the esteemed accolade.

"PPR have an incredible reputation for building some of the very best luxury brands in the world," said Christopher Kane in a statement Tuesday.

In PPR's luxury portfolio, the young talent will join other British names such as Mr. McQueen and Ms. McCartney, whose development has been supported by the company for over a decade.

PPR's Gucci unit purchased a 51% stake in Alexander McQueen in 2000, while Ms. McCartney built her label from scratch starting from 2001 with the support of the company. Alexander McQueen's sales have been multiplied by 12 since its acquisition, said Mr. Babeau Tuesday, adding that both brands—whose figures aren't broken down in the company's trading updates—now have an annual revenue of over €100 million ($133.8 billion) each.

Mr. Babeau said that PPR's "intent is to replicate that success" with Christopher Kane. The London-based company currently employs 26 people and distributes its garments through around 200 wholesale outlets, but it has yet to have a presence in direct retail. For PPR, the opening of a store for the brand—most likely in London in 2014—will be "one of [its] first quests," said Mr. Babeau. The French company also has plans for Christopher Kane to develop beyond Europe—where it does close to 50% of its business—and the U.S., expanding in Asia, and widen its offer into leather goods and accessories.

The move fits well the luxury-to-lifestyle group's strategy to buy smaller brands with a strong growth potential as it seeks to bolster its high-end goods division. Last month, PPR announced the acquisition of Chinese fine-jewelry maker Qeelin Ltd.

Over the past decade, PPR has shifted out of its low-growth retail chain businesses into high-profile brands. Last year, the company plowed ahead with the disposal of its remaining retail assets, Redcats and Fnac, which are in the process of being sold and spun-off respectively.

http://online.wsj.com/article/SB10001424127887324235104578243391383861444.html#

 

[Crying Diamonds]

How exciting for Christopher Kane! Using his spring collection as an example it is quite obvious that he is a unique and recognizeable talent, and I think their investment in this brand will really pay off, as it did with McQueen (..debts aside).
It's a good choice for PPR to make to re-infuse that innovative streak, now that McQueen is dead, Ghesquiere has left Balenciaga and Saint Laurent has turned into Dior Homme.
I am excited about what this new backing will bring about at Christopher Kane.. one hopes that the brand's new expansion into leather goods etc, will be very profitable as so, for the sake of profit, he isn't forced to dumb down any of his excellent, and weird little ideas which are his signature.

 

[Salvatore]

Not surprised.
Hopefully it will be very good for him !

 

[perhydrol]

Kering to Sell Christopher Kane Back to Designer.

The French luxury conglomerate is in talks to sell its 51 percent stake in the label back to the British designer after a 5-year partnership.

PARIS, France — Kering is in talks to sell its 51 percent stake in fashion label Christopher Kane back to the namesake designer after a 5-year partnership.

“Kering is announcing that discussions are underway with Mr. Christopher Kane about the conditions in which the British designer could take back full control of the eponymous brand. Christopher Kane and Kering wish to continue to collaborate with the aim of achieving a gradual and harmonious transition,” said the company in a statement.

The move follows Kering’s disposal of its 50 percent stake in Stella McCartney, which it sold back to the namesake designer in March. In January, Kering said it would spin off German sportswear brand Puma to its own shareholders, reducing its stake to 16 percent from 86 percent, as part of the French conglomerate’s long-held plans to focus purely on luxury.

In recent cycles, Kering has focused greater attention on fashion labels like Gucci — the group’s cash cow and a blockbuster success under the duo of Marco Bizzarri and Alessandro Michele — Saint Laurent and the still small but white-hot and fast-growing Balenciaga, designed by Demna Gvasalia. More recently, the company appointed ex-Céline ready-to-wear director Daniel Lee the new creative director of Bottega Veneta, replacing Tomas Maier.

A graduate of London’s Central Saint Martins, Christopher Kane established his namesake label in 2006, with his sister Tammy running the financial side of the business and assisting in fabric creation and the design process. His first independent show, a collection of neon bandage dresses, was presented for Spring/Summer 2006 at London Fashion Week. Over the following seasons, Kane garnered critical acclaim for his manipulation of textures and silhouettes and modern feminine looks.

Kering took a 51 percent stake in the company in 2013 for an undisclosed sum and helped to finance the opening of a standalone retail store on London’s Mount Street and an e-commerce site. The label currently has more than 150 wholesale accounts in 30 countries.

Yet the business has not grown significantly since the acquisition. In the year ended December 31, 2013, Christopher Kane generated £6.97 million, according to filings with Companies House in the UK. Three years later, revenue stood at £7.8 million.

from businessoffashion.com

 

[Benn98]

From a creative pov, this should be great for Kane. I think his brand is at the moment quite established. Now is the time for him and Tammy to expand, but at their own pace. Perhaps he can dabble more with menswear. God knows we need it what with talentless hacks now in top positions. He's managed his brand rather sensibly so far, doubt he'll muck it up going forward. You don't even need to be a pundit to see that Kane's label isn't set up to be the next cash cow.
Kering is a conglomerate who seems only concerned with the bottom line. That's fair enough, but as much as I'm mad about Gucci, I'd say it's success is precarious at best. It's not sustainable. It's tied to a specific direction which may fall out of favour at any given time, then what? But I can see how they're thinking. With the appointment of Virgil, the streetwear trend will probably run for another decade or so. And with 2 key players in the game, Kering looks set to coin it until that happens.

Now only if they'd would also cut McQueen loose! Because once they'll have done that, Burton will be ousted.

 

[vetements]

From a creative pov, this should be great for Kane. I think his brand is at the moment quite established. Now is the time for him and Tammy to expand, but at their own pace. Perhaps he can dabble more with menswear. God knows we need it what with talentless hacks now in top positions. He's managed his brand rather sensibly so far, doubt he'll muck it up going forward. You don't even need to be a pundit to see that Kane's label isn't set up to be the next cash cow.
Kering is a conglomerate who seems only concerned with the bottom line. That's fair enough, but as much as I'm mad about Gucci, I'd say it's success is precarious at best. It's not sustainable. It's tied to a specific direction which may fall out of favour at any given time, then what? But I can see how they're thinking. With the appointment of Virgil, the streetwear trend will probably run for another decade or so. And with 2 key players in the game, Kering looks set to coin it until that happens.

Now only if they'd would also cut McQueen loose! Because once they'll have done that, Burton will be ousted.

This reads more of getting rid of him, like Stella, because they don’t fall into the category of a rich, historical fashion house doing streetwear appealing mainly young crowd or nouveau riche Asians.
But Benn, you are right, they won’t even let someone like Kane be in the stable because they are not even willing to support him if he’s in the red for future business sustainability when street wear goes out of fashion, or simply for a variety of ‘look’.

With the replacement of Haider Ackerman with Kris Van Asche, VA at LV tells us the sad state of fashion now. Street wear is fine, but it’s too much now at this rate.

 

[Benn98]

This reads more of getting rid of him, like Stella, because they don’t fall into the category of a rich, historical fashion house doing streetwear appealing mainly young crowd or nouveau riche Asians.
But Benn, you are right, they won’t even let someone like Kane be in the stable because they are not even willing to support him if he’s in the red for future business sustainability when street wear goes out of fashion, or simply for a variety of ‘look’.

That's what I don't get! My dad is in the spirit business and run a small collective with a few labels. On board is arguably one of the most prestigious champagnes, an incredibly well-known tequila, some storied Irish whiskeys and a few craft upstarts (mainly gin&vodka). That sort of variety not only keep things interesting because the marketing approach for each label will be different, but it also guarantee a horse in every race (since we're going all equestrian, ). Isn't the key to a great portfolio one with diverse fragments?

From a business pov, yes, Kane's growth doesn't look very good, but I wonder how Kering approached the management of his brand. Creatively his output seemed fine to me.

 

[YohjiAddict]

As a sidenote that press article is wrong. Kane's first independent show was S/S 2007. Not really that important but they should really be more careful in their research.