- Angela Gonzalez-Rodriguez |
New York - The terrible enfant of French fashion and the Swiss group - the world’s third luxury player by capitalisation - have announced a collaboration. Richemont thus prepares himself to face an increasingly fierce competition to dominate the luxury fashion and accessories industry.
At a time when LVMH has redoubled its commitment to jewellery, which has so far been Richemont's strong point, the Swiss group pulls out the heavy artillery: earlier this week it announced a collaboration agreement with the Moroccan designer Alber Elbaz, considered by many as the 'enfant terrible' of Parisian fashion.
Richemont pulls out the heavy artillery to cope with a possible LVMH-Tiffany’s deal
If completed, the acquisition of Tiffany & Co. will be the largest carried out by LVMH in its history, which only adds pressure on the direct rivals of the group chaired by Arnault, namely Kering and Richemont.
Richemont, better known as a jewellery and watch business, gave few details of this new "startup", and refused to comment on whether Elbaz would launch a full brand and clothing collections.
The project is a turning point for Richemont, which has less weight in the high-end fashion segment compared to its rivals LVMH (LVMHA.PA), owner among other brands of Louis Vuitton and Christian Dior, or the parent group to Gucci , Kering (PRTP.PA). This mounting pressure has led Kering to bet on inorganic growth to expand its portfolio of fashion brands, which already includes Yoox Net-a-Porter, Chloe and Azzedine Alaia.
Richemont's jewellery labels - Cartier and Van Cleef & Arpels in particular - have performed well, but like their luxury rivals, the company’s exposure to turmoil in Hong Kong, has taken a toll on the group’s finances.
Rebecca Robins, global head of luxury at Interbrand said recently that a bid from Richemont counter offering LVMH’s offer for Tiffany is “unlikely” since it’s looking to diversify its portfolio elsewhere. And she added that however good those “solutions” may be, it’s hard to see them hurting LVMH as much as a reinvigorated Tiffany could hurt Richemont.
Elbaz breaks with low profile after his departure from Lanvin to launch AZFashion
The resulting company will be AZ Fashion, an innovative and dynamic startup, “destined to turn dreams into reality, "according to a joint statement. The firm will focus on" developing solutions for the women of our time," per Elbaz’ comments.
It’s worth recalling that during his 14 years tenure at the helm of Lanvin, Elbaz was attributed the renovation of the French couture house, with modern versions of silk cocktail dresses and colourful and feminine designs. Lanvin's sales plummeted after his departure in 2015 and the brand was finally bought by Fosun.
Since then, highlights Bloomberg, Elbaz has been courted by luxury brands: most recently he collaborated with the Italian shoemaker Tod’s on some moccasin and bag designs, although he had not committed to a particular brand.
"Listening to Alber Elbaz describe his vision of fashion and the projects that inspire him, I was impressed again by his creativity and insight," Richemont president Johann Rupert explained, commenting on the announcement earlier this week. “His talent and inventiveness, with his sensitivity towards women and his well-being, will be of great value to our group and its maisons. We warmly welcome Alber to Richemont and look forward to an exciting partnership,” Rupert concluded.
For his part, Elbaz said he is "very happy to partner with Richemont and establish my ‘dream factory’, which will focus on developing solutions for the women of our time. I am extremely excited to collaborate with good people, talented and intelligent people, and I also hope to have a lot of fun with this new adventure. ”
Richmont will publish a financial update on November, 8.
Picture: CHRISTOPHE ARCHAMBAULT / AFP