LVMH Moët Hennessy Louis Vuitton (Paris) is rumored to be selling its popular but never profitable Christian Lacroix fashion line.
An executive at LVMH confirmed to The New York Times, on condition of anonymity, that a deal was in progress to sell Lacroix to The Falic Group (Hollywood, Fla.), a $620 million beauty and duty-free retailing company. The Falic Group, which operates Duty Free Americas Inc., bought two of LVMH’s niche cosmetics brands, Hard Candy and Urban Decay, in 2003.
The move would be consistent with the policy stated recently by ceo Bernard Arnault to focus on the company’s core brands, such as Dom Pérignon Champagne, Christian Dior, Fendi leather goods and the Kenzo and Givenchy clothing lines.
Lacroix is the only brand Arnault himself started from scratch. He founded the Lacroix house in 1987. The designer had been trained as an art historian, and he parlayed his sense of color and joie de vivre, relating to his native Arles in the south of France, into upbeat and exuberantly embellished collections that rejuvenated dusty haute couture elegance. However, after 17 years and the introduction of lower-priced ready-to-wear clothes and accessories, the house has not yet broken even; insiders calculate the entire LVMH investment at as much as $260 million.
Lacroix is in the midst of preparing his haute couture collection to be shown at the end of this month. There is a rumor that Arnault hopes to sell the Lacroix brand name but to keep Lacroix on as designer of the Emilio Pucci brand within LVMH.
The Falic Group was founded by three Lebanese-Russian brothers. They took over the World Duty Free Americas chain of duty-free shops in 2001 and created Duty Free Americas, operating mainly in North and South America and focusing on fragrances, beauty products and liquor. Falic also owns the Judith Leiber brand of handbags and accessories.
Even if there is an agreement in progress, it cannot be made public under French law, which requires that a company’s unions first vote on any change in ownership.