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Marc Jacobs to Leave Louis Vuitton Marc Jacobs to Leave Louis Vuitton
(about 3 hours later)
PARIS — The fashion designer Marc Jacobs is leaving Louis Vuitton after 16 years to concentrate on his own eponymous line, according to Bernard Arnault, chairman and chief executive of LVMH Moët Hennessy Louis Vuitton, which has a majority stake in Mr. Jacobs’s company. PARIS — The fashion designer Marc Jacobs is leaving Louis Vuitton after 16 years to concentrate on his namesake line, according to Bernard Arnault, the chairman and chief executive of LVMH Moët Hennessy Louis Vuitton, which has a majority stake in Mr. Jacobs’s company.
“When we started together, Marc Jacobs was a tiny little business of around $20 million,” Mr. Arnault said in an interview on Wednesday. “Now the totality of sales is approaching $1 billion. It has been an enormous growth. “When we started together, Marc Jacobs was a tiny little business of around $20 million,” Mr. Arnault said in an interview Wednesday. “Now the totality of sales is approaching $1 billion. It has been an enormous growth.”
“We left it to Marc and to Robert Duffy to decide when they wanted to concentrate on the brand,” he continued, referring to Mr. Jacobs’s business partner, Mr. Duffy. “Now we have come to an agreement and the object is to assist them with an introduction on the bourse,” or stock exchange. Mr. Arnault confirmed that the Marc Jacobs brand is working on an initial public offering. “We left it to Marc and to Robert Duffy to decide when they wanted to concentrate on the brand,” he continued, referring to Mr. Jacobs’s business partner. “Now we have come to an agreement and the object is to assist them with an introduction on the bourse.” Mr. Arnault confirmed that the Marc Jacobs brand was working on an initial public offering.
Mr. Jacobs, 50, confirmed his departure backstage at the Louis Vuitton spring 2014 show in Paris. His notes in the program ended with the words: “For Robert Duffy and Bernard Arnault, All my love, Always.” And so, even as it loses its chief designer, LVMH will be poised to benefit from sharing in that potential billion-dollar payoff from Mr. Jacobs’s stock offering.
Although rumors have circulated that LVMH had difficulties with the designer’s sometimes erratic behavior and recent contract negotiations were reported to have been in doubt, Mr. Arnault praised the outgoing designer, saying, “I am very eager to congratulate him and his team for everything they have done for Louis Vuitton.” The events at LVMH are taking place in a moment of turmoil in the luxury industry, as groups have been solidifying their positions and designers have become commodities, bought by the highest bidder. Even fledgling designers are being brought into the luxury fold, with LVMH in a constant skirmish with its main rival, Kering, formerly PPR.
However, the mood at the show was wistful. It was intensely black and had many elements — a carousel, a grand hotel elevator and twin escalators — that had been stage sets at previous LV shows. In fact, Mr. Jacobs, 50, is a rare designer who has succeeded not only as creative director at Vuitton, but also in building his own brand with fashion lines at multiple price points and marketing that has been embraced by Hollywood and pop culture. John Galliano, the former designer at Christian Dior, before he was disgraced by a racist slur, never managed to give his own label major resonance, and it was viewed as what the French call a “danseuse,” or plaything.
Michael Burke, the chairman and chief executive of Vuitton, said the typical model was still to have a designer at a major house, with his or her own brand seen as a “stepchild.”
“Marc and Robert’s company deserves to be much more than a stepchild — that is the conclusion that we have all come to recently,” Mr. Burke said. “It will be more stabilizing for Marc because he has his name above the door.”
Mr. Jacobs confirmed his departure backstage at the Louis Vuitton spring 2014 show in Paris. His notes in the program ended with the words: “For Robert Duffy and Bernard Arnault, All my love, Always.”
Although rumors have circulated that LVMH has had difficulties with the designer’s sometimes erratic behavior, Mr. Arnault praised the outgoing designer, saying, “I am very eager to congratulate him and his team for everything they have done for Louis Vuitton.”
The mood at the show, however, was wistful. It was intensely black and had many elements — a carousel, a grand hotel elevator and twin escalators — that had been stage sets at previous Vuitton shows.
“It’s like a funeral,” said Edward Enninful, the fashion and style director of W magazine, as he entered the show.“It’s like a funeral,” said Edward Enninful, the fashion and style director of W magazine, as he entered the show.
And the showgirl clothes, with their giant Folies Bergère feather headdresses and jet-embroidered chiffon, gave the impression that the party performance was over, not least because bluejeans were often worn as a counterpart to the finery.And the showgirl clothes, with their giant Folies Bergère feather headdresses and jet-embroidered chiffon, gave the impression that the party performance was over, not least because bluejeans were often worn as a counterpart to the finery.
At the start of the show, which received a standing ovation, the graffiti lettering on hose harked back to the work of Stephen Sprouse in 2000, one of the early art collaborations with Mr. Jacobs. But this time around, accessories and especially the 16 small and unremarkable Louis Vuitton purses did not steal the show.At the start of the show, which received a standing ovation, the graffiti lettering on hose harked back to the work of Stephen Sprouse in 2000, one of the early art collaborations with Mr. Jacobs. But this time around, accessories and especially the 16 small and unremarkable Louis Vuitton purses did not steal the show.
A jumpsuit with graffiti reading “I Love Paris” was part of the “goodbye” show. “It was an ode to Paris and to all the people I have been involved and work with. This city has been so great,” said Mr. Jacobs, who is expected to return to his native New York, where his own company is based. A jumpsuit with graffiti reading “I Love Paris” was part of the “goodbye” show. “It was an ode to Paris and to all the people I have been involved and work with. This city has been so great,” said Mr. Jacobs, who is expected to return to his native New York, where his company is based.
Now the attention shifts to who will take over at Louis Vuitton, which is the cash cow of the multibillion dollar luxury group. Now the attention shifts to who will take over at Louis Vuitton, which is the cash cow of the multibillion-dollar luxury group.
The bets are on Nicolas Ghesquière, formerly the designer for Balenciaga, owned by luxury group Kering, formerly known as PPR. But Delphine Arnault, Mr. Arnault’s daughter and an executive vice president at Louis Vuitton, made a gesture at the Vuitton show to indicate that her lips were sealed. An early favorite is Nicolas Ghesquière, formerly the designer for Balenciaga, owned by Kering. But Delphine Arnault, Mr. Arnault’s daughter and an executive vice president at Louis Vuitton, made a gesture at the Vuitton show to indicate that her lips were sealed.
Later, Mr. Arnault said that he expected an announcement of a new designer would be made by the end of October, and that he would have no problem if the new designer also had a personal fashion line. “Why not?” he asked. Later, Mr. Arnault said that he expected an announcement about a new designer by the end of October, and that he would have no problem if the new designer also had a personal fashion line. “Why not?” he said.
Last week, Reuters reported that Mr. Jacobs’s contract had not been resolved, although negotiations began in January, and noted the significance for a label that accounts for annual sales of nearly 7 billion euros, or $9.5 billion, and more than half of LVMH’s operating profits. Louis Vuitton’s growth, after years of annual gains of 10 percent or more, has slowed to 5 percent to 6 percent this year, while LVHM has not kept track with the broader European luxury sector, the Reuters report noted. Last week, Reuters reported that Mr. Jacobs’s contract had not been resolved, though negotiations had begun in January, and noted the significance of that fact for a label that accounts for annual sales of nearly ¤7 billion, or $9.5 billion, and more than half of LVMH’s operating profit. Louis Vuitton’s growth, after years of annual gains of 10 percent or more, has slowed to 5 percent to 6 percent this year, while LVMH has not kept track with the broader European luxury sector, the Reuters report noted.
Also last week, Vuitton announced that it had hired Darren Spaziani, most recently the director of accessories at Proenza Schouler in New York, to develop a higher-end collection of accessories. Mr. Spaziani previously worked with Mr. Jacobs at Louis Vuitton and Mr. Ghesquière at Balenciaga, prompting further speculation that a bigger change in creative direction was in the works. Editors and retailers reacted positively to the news after the show. Also last week, Vuitton announced that it had hired Darren Spaziani, most recently the director of accessories at Proenza Schouler in New York, to develop a higher-end collection of accessories. Mr. Spaziani previously worked with Mr. Jacobs at Louis Vuitton and Mr. Ghesquière at Balenciaga, prompting further speculation that a bigger change in creative direction was in the works.
Editors and retailers reacted positively to the news after the show.
“Marc is absolutely significant to fashion,” said Ken Downing, the fashion director of Neiman Marcus. “But as we have seen at many other houses, designers have taken a hiatus or been replaced by other talents. It has been a Marc moment for many years here, but fashion is an industry of change. It is never the same day any day.”“Marc is absolutely significant to fashion,” said Ken Downing, the fashion director of Neiman Marcus. “But as we have seen at many other houses, designers have taken a hiatus or been replaced by other talents. It has been a Marc moment for many years here, but fashion is an industry of change. It is never the same day any day.”
Alexandra Shulman, the editor of British Vogue, noted the implication for Mr. Jacobs’s signature label, which recently expanded with a new line of cosmetics, in a post on the magazine’s Web site. “It’s important to know how to exit, as well as arrive, and it’s going to be exciting to see how this impacts on the creativity in his own line,” she said. Alexandra Shulman, the editor of British Vogue, noted the implication for Mr. Jacobs’s signature label, which recently expanded with a new line of cosmetics, in a post on the magazine’s Web site. “It’s important to know how to exit, as well as arrive, and it’s going to be exciting to see how this impacts on the creativity in his own line.”
Mr. Jacobs, after a famously ill-fated early career at Perry Ellis, started his signature company 20 years ago and joined Vuitton in 1997 at the beginning of a period of rapid growth in the luxury sector. The period also marked the beginning of an intense competition between the two major luxury conglomerates, LVMH and Kering, as they acquired virtually every historic fashion brand in Europe, as well as some in America. Mr. Jacobs, after an ill-fated early career at Perry Ellis, started his signature company 20 years ago and joined Vuitton in 1997 at the beginning of a period of rapid growth in the luxury sector. The period also marked the beginning of intense competition between the two major luxury conglomerates, LVMH and Kering, as they acquired virtually every historic fashion brand in Europe, as well as some in America.
Mr. Jacobs’s tenure at Vuitton became one of the most successful examples of a revival of a historic French house, and also the longest-running apart from Karl Lagerfeld at Chanel and Fendi, spawning what has become a standard business model to place contemporary designers at historic fashion labels. While Vuitton’s ready-to-wear has become a substantial business, its accessories have been the most important money makers for LVMH, including collaborations with Mr. Sprouse and the artists Takashi Murakami and Richard Prince. Mr. Jacobs’s tenure at Vuitton became one of the most successful examples of a revival of a historic French house, and also the longest-running, apart from Karl Lagerfeld at Chanel and Fendi, spawning what has become a standard business model to place contemporary designers at historic fashion labels. While Vuitton’s ready-to-wear has become a substantial business, its accessories have been the most important money makers for LVMH, including collaborations with Mr. Sprouse and the artists Takashi Murakami and Richard Prince.
The departure of Mr. Jacobs, who is also seen as a potential successor to Mr. Lagerfeld at Chanel someday, also comes during a Paris season that has been filled with great fashion moments and even greater intrigue. Executives on both sides have said privately over the last week that there had been tension between the designer and LVMH, with each side leaking details of their frustrations to manipulate the possible outcomes. But they ultimately reached an agreement that was in their mutual interests, they said. The departure of Mr. Jacobs, who is also seen as a potential successor to Mr. Lagerfeld at Chanel, also comes during a Paris season that has been filled with great fashion moments and even greater intrigue. Executives on both sides have said privately over the past week that there had been tension between Mr. Jacobs and LVMH, with each side leaking details of their frustrations. But they ultimately reached an agreement that was in their mutual interests, they said.
LVMH and Kering are once again investing in young designer labels at a rapid pace, with J.W. Anderson of London and the shoe designer Nicholas Kirkwood joining LVMH, and Joseph Altuzarra and Christopher Kane now linked with Kering. LVMH and Kering are once again investing in young designer labels at a rapid pace, with J.W. Anderson of London and the shoe designer Nicholas Kirkwood joining LVMH, and Joseph Altuzarra and Christopher Kane now linked up with Kering.
With his longtime business partner, Mr. Duffy, Mr. Jacobs has meanwhile increasingly sought to continue to develop the Marc Jacobs label and its lower-priced collections. During similarly fraught contract negotiations a decade ago, the duo won significant commitments from LVMH, the majority owner of the brand, to further develop its retail and design. With his longtime business partner Mr. Duffy, Mr. Jacobs has sought to develop the Marc Jacobs label and its lower-price collections. During similarly fraught contract negotiations a decade ago, the duo won significant commitments from LVMH to develop further the brand’s retail and design.
The potential of a public offering, which would follow a major offering from Michael Kors two years ago, has been described as an opportunity for LVMH to divest its interest in the Marc Jacobs company, and for Mr. Jacobs and Mr. Duffy to invest further in the brand’s development. But for that to happen, it was seen by executives on both sides as necessary for Mr. Jacobs to return fulltime to his own company. The potential of a public offering, which would follow a major offering from Michael Kors two years ago, has been described as an opportunity for LVMH to divest its interest in the Marc Jacobs company, and for Mr. Jacobs and Mr. Duffy to invest further in the brand’s development. But for that to happen, executives on both sides said it was necessary for Mr. Jacobs to return full time to his own company.
The European luxury brand Moncler also intends to float shares in an I.P.O. later this year, said a person briefed on its plans.
Wall Street bankers said that driving much of the interest in high-fashion stock deals is the extraordinary success of Mr. Kors’s I.P.O. Shares of Michael Kors have tripled since its offering in December 2011, making it one of the most successful offerings in recent years. Mr. Kors has made hundreds of millions of dollars from taking his company public, and his private equity backers have made billions.
Like Mr. Jacobs, Mr. Kors started as a high-end designer but has grown his business by introducing lower-price collections while retaining a strong fashion brand.
Peter Lattman contributed reporting from New York.