Jan 15, 2013
PPR to step up Christopher Kane 's expansion after deal
Jan 15, 2013
PARIS - French luxury group PPR is to expand the Christopher Kane fashion brand's presence in Asia, open boutiques and grow its accessories business after acquiring a 51 percent stake in the British designer's label.
The deal, for an undisclosed sum, is part of PPR's strategy to beef up its luxury portfolio with small brands that have growth potential, in a bid replicate its success with Stella McCartney and Alexander McQueen.
Christopher Kane, known for his modern designs, digital prints and original mix of fabrics, was founded in 2006 by the Scottish-born designer and his sister Tammy after he graduated from Central Saint Martins College, London.
"We think it can become a sizeable business," Alexis Babeau, managing director of PPR's luxury division, told journalists on Tuesday. PPR also has a sportswear business.
Babeau said PPR had increased sales of Alexander McQueen 12 times since buying control in 2001, adding that annual revenue generated by the British brand and by Stella McCartney both exceeded 100 million euros ($134 million).
While it took several years for PPR to turn those two brands into profitable operations, Babeau said Christopher Kane was already making money.
PPR also owns French fashion brands Balenciaga and Yves Saint Laurent as well as Italian labels Bottega Veneta and Gucci, the world's second largest fashion brand in terms of sales after Louis Vuitton.
It also controls sports brands Puma and Volcom.
Kane launched his first menswear and resort collections in 2010 and was the lead designer of Versace's Versus line until 2012. Christopher Kane is distributed by wholesalers at 200 addresses
"The brand is a ready-to-wear brand but we hope to expand other areas such as leather goods and accessories," Babeau said, adding that the former currently made up 4 percent of sales.
FIRST LONDON BOUTIQUE
Babeau said the aim was to open a first Christopher Kane boutique in London as early as next year and develop its network of shops thereafter. He said the brand, which made more than half its sales in Europe, had "room to grow in Asia".
For now, Christopher Kane will be managed by its founders and could be run by a PPR-appointed chief executive later.
Kane himself said while he had met with other potential suitors, he was attracted by PPR's experience developing British brands which he "saw as good prospect for the future".
PPR, which looked at jeweller Harry Winston - which agreed on Monday to be acquired by Swatch - but thought was too expensive, is completing its transformation into a pure luxury and sportswear group by selling its retail operations.
After disposing of furniture chain Conforama and unveiling plans to spin off electronics retailer Fnac later this year, PPR said this month it was in talks to sell children brands Cyrillus and Vertbaudet to private equity firm Alpha for 119 million euros.
In December, PPR said its Redcats mail order business had agreed to sell its U.S. plus-size fashion business OneStopPlus Group to private equity group Charlesbank Capital Partners and Webster Capital for an enterprise value of $525 million.
Babeau said PPR continued to be on the lookout for small to mid-sized brands but no deal was planned in the near future.
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