Lanvin by But Sou Lai | Source: NY Times

The Inside Story of a Couture Dream in the Making (IHT)
“Few dare to focus on a blank page, even if it has a gilded trim, or to imagine that a cover could be made from gros grain, with the texture of a couture dress and no sign of a title — until you find the names embossed on the gilding: ‘Lanvin’ and ‘Alber Elbaz.’… ‘I didn’t want to make it a retrospective, the beginning of the end,’ says Mr. Elbaz, who is celebrating covertly his first decade at Lanvin.”

Lion Capital’s Lyndon Lea defends his performance (Telegraph)
“In recent months, however, Lion, a private equity firm famous for turning Jimmy Choo into an international luxury brand, has lost some of its glamour… Lea models Lion’s culture on the creative businesses it invests in, a different approach from most numbers-obsessed private equity firms, even if he does get some stick for the wild parties.”

Supergroup sales jump over Christmas (Reuters)
“SuperGroup, the company behind the Superdry fashion brand, posted a 22 percent rise in group sales over the key Christmas period as it overcame distribution issues which had dogged the firm in 2011.”

Valentino’s Creative Directors Prepare For Their Men’s Runway Debut (Style.com)
“Tomorrow in Florence, Valentino’s Maria Grazia Chiuri and Pier Paolo Piccioli debut their Fall ‘12 menswear collection as the invited guests of Pitti Uomo. The occasion marks the first runway show for the men’s collections, which the designers took over several season ago and have been quietly showing by appointment in their Place Vendome showroom—where it has been a quiet highlight of the Paris collections—ever since.”

Sole Man Blake Mycoskie (WSJ)
“Although he’s the founder of TOMS Shoes, the company that donates a pair of shoes to a child in need for every pair sold, his name isn’t Tom. Social entrepreneur Blake Mycoskie named his for-profit company after his original charitable inspiration, ‘Shoes for a Better Tomorrow,’ which eventually became ‘Tomorrow’s Shoes,’ and then ‘TOMS.’

Lanvin Spoof Video | Source:

NEW YORK, United States — At BoF, we’ve been ranking the top fashion films of the season since 2009, when the genre was still just coming into existence. But even back then, set against the staggering rise of online video consumption and the growing importance of engaging young digital consumers, the medium’s tremendous potential was clear.

Fast-forward to the Autumn of 2011 and YouTube-friendly short videos are practically de rigueur for fashion brands, large and small. But interestingly, it’s not digital “Geniuses” like Burberry who have been creating the most compelling fashion films. Despite being labeled “Challenged” by a Digital IQ report recently released by LuxuryLab, we think the Prada Group is making some of the best digital films in the industry, working with top fashion image-maker Steven Meisel.

But this season, it was Lanvin’s viral sensation (also shot by Meisel), featuring Karen Elson and Raquel Zimmermann dancing awkwardly to “I Know You Want Me (Calle Ocho)” by Pitbull, that proved to be the game-changer that propelled fashion film decisively into the mainstream. The film struck a chord with a broad internet audience, earning over 100,000 YouTube views in the first three days online, providing the spark for a real-life dance competition at a buzzed about and well-attended Fashion’s Night Out event at the brand’s Madison Avenue boutique, and even spawning spoofs, the surest sign of of viral success.

Notably, it was stills from the Lanvin video that appeared in print advertising, flipping a well-established paradigm and highlighting fashion film’s trajectory towards the very centre of seasonal marketing initiatives.

And while we continued to see some absolutely stunning examples of films that look and feel like print campaigns or magazine editorial beautifully brought to life, it’s ‘digital first’ fashion videos, conceived from first principles with the online medium in mind, that broke the mold with humour, quirky charm or unconventional visual techniques which seemed to resonate most with online audiences.

What follows is BoF’s selection of the most powerful and interesting fashion films of the 2012 Spring-Summer season. As you sit back and enjoy the videos, let us know which ones you like best.

1. Lanvin Fall/Winter 2011 Ad Campaign

Dubbed “Park Avenue YouTube,” Lanvin’s tongue-in-cheek, fall campaign video — featuring top models Raquel Zimmermann and Karen Elson dancing uncomfortably in a chic apartment to Pitbull’s 2009 smash hit “I Know You Want Me (Calle Ocho)” and a hilarious cameo by creative director Alber Elbaz — had just the right elements to drive explosive word of mouth amongst fashion fans across the internet, while perfectly communicating the distinctive personality of the Lanvin brand. Shattering the seriousness that has often prevented fashion film from resonating with a broader audience, the Steven Meisel-shot video has already earned almost a million cumulative views on YouTube, been shared hundreds of thousands of times on Facebook, and inspired a spoof remix “starring the attendees of Fashion Week in New York” as well as a popular fan made imitation video.

2. Prada Fall/Winter 2011 Ad Campaign

Following on their first place ranking last season, Prada’s fall womenswear video, shot by Steven Meisel and featuring Antonia Wesseloh, Ondria Hardin, Kelly Mittendorf, Julia Zimmer and Frida Gustavsson, perfectly captures and communicates the delicate co-mingling of sensuality and innocence at the heart of Mrs. Prada’s collection. Set to a hypnotic soundtrack with a breathy voiceover, the slow motion film is also a seductive and transfixing digital merchandising dream, full of sequins, fur and snakeskin. We only wish it was directly shopable.

3. Mourir Aupres De Toi by Spike Jonze & Olympia Le-Tan

Set after-hours on the shelves of famous Left Bank bookstore Shakespeare & Company, Spike Jonze’s quirky stop-motion animation “Mourir Aupres De Toi” brings to life the embroidered ‘covers’ of Olympia Le-Tan’s book-clutch bags to tell the touching story of a clumsy skeleton and his lover. Using over three thousand pieces of hand-cut felt, the film beautifully communicates the handmade aesthetic and human charm of Le-Tan’s work. “I love getting performances from, telling stories about and humanizing things that aren’t human,” Jonze told Nowness, where the film first appeared.

4. “Dynamic Blooms” by Nick Knight & Alister Mackie

Recently released by experimental filmmakers Tell No One in collaboration with SHOWstudio, this succinct, visually stunning film brings to life Nick Knight and Alister Mackie’s breathtaking editorial for last season’s AnOther Magazine. Featuring Benjamin Warbis and Jac Jagaciak, the video collides dance and fashion, transforming pieces by Lanvin, Versace, Chloe, Valentino, Christian Dior Haute Couture, Jil Sander and Haider Ackermann into dynamic contemporary blossoms that explode across the screen.

5. Prabal Gurung Resort 2012 – “New Thing” feat. Rye Rye

For the launch of his first ever foray into resort, inspired by Japanese artist Yayoi Kusama and the portraits of George Condo, rising designer Prabal Gurung teamed up with booty-shaking Baltimore artist Rye Rye to create a viral music video as bold and energetic as the graphic black and white theme, 60s-inspired florals, polka-dots, and pops of pinks, yellows and greens that run through the collection. Directed by Kenneth Cappello, the video deploys a dynamic high-low mix to explosive effect and underscores the power of integrating fashion, film and music to earn the attention of what Gurung has called “the YouTube generation.”

6. AnOther Magazine Issue 21 featuring Rachel Weisz

Shot by Craig McDean with creative direction by David James and styling by Olivier Rizzo, this off-kilter film features Rachel Weisz, cover star of this season’s AnOther Magazine, in a series of non-narrative micro-performances, inspired by German modern dance legend Pina Bausch. While magazines have long used online videos as supplementary material to support their print content, this film is a compelling example of ‘digital first’ editorial: the images that appear in print are stills taken from this surreal film.

7. Love F/W 2011 What Lies Beneath by Mert Alas & Marcus Piggott

Accompanying “What Lies Beneath,” an epic 46-page, Jeff Bark-inspired fashion story shot by Mert Alas and Marcus Piggott for Katie Grand’s Love magazine, this disturbing but compelling film collides romantic elements with a hard-edged and dangerous undercurrent. Complete with white swans, bondage gear and submerged cars, this sexually-charged and transfixing film unfolds like a classical myth reimagined for a disjointed, nightworld where Lara Stone, Mariacarla Boscono, Saskia De Brauw, Kristen McMenamy, Paul Boche, Anais Pouliot, Jed Texas, Guinevere Van Seenus, Xiao Wen Ju and Angus Whitehead play dark contemporary demigods and water nymphs.

8. Gareth Pugh S/S 2012 by Ruth Hogben

This season, East London’s enfant terrible Gareth Pugh teamed up with Ruth Hogben to create a dark and punchy film that was screened at the designer’s Paris catwalk show, as well as on Nick Knight’s fashion website SHOWstudio. Integrated into the runway event, the film both set the tone at the beginning of the show and provided a digital backdrop to the models on the catwalk, turning the presentation of Pugh’s collection into a multimedia viewing experience for the assembled press, buyers and industry insiders.

9. Twin Parallel by Justin Anderson

Directed by Justin Anderson for London-based designer Jayne Pierson and inspired by the twin paradox in physics, this beautiful film won this season’s ‘Best Styling’ prize at Diane Pernet’s A Shaded View on Fashion Film festival, which took place during Paris Fashion Week at the Centre Pompidou. The film’s immaculately styled, still life tableaux, featuring fruit, candles, a cuckoo clock and a goose that presumably lays gold, sharpen the eye and draw attention to the royal details of Pierson’s collection.

10. Kenzonique by Kenzo

This snappy and upbeat trailer for the relaunch of Kenzo, directed by Jo Ratcliffe with music by Rob Coudert, perfectly teased the energy of the brand’s first presentation under new creative directors Humberto Leon and Carol Lim of Opening Ceremony. Dubbed “hyperdelic” on YouTube, the video’s vibrant colour palette and fun feel were totally in tune with the new collection and clearly communicated the brand’s repositioning as a playful creative force at the top end of the contemporary market.

What were your favourite fashion films this season?

Burberry Mens A/W Show 2011 in Milan | Source: Oki-ni CultureShoq

Today, BoF exclusively brings you Savigny Partners’ blow-by-blow analysis of the rapidly shifting luxury fashion business model which is undergoing transformation due to underlying shifts in consumer values, technology and globalisation

LONDON, United Kingdom — Luxury fashion is a very exciting business which can generate substantial returns if you get the formula right. Not only is there the ability to charge up to ten times the cost of manufacturing a garment and the potential to build a global business; apparel can be the beginning of a page-turning blockbuster, accessories and leather goods are the next chapter, fragrances and eyewear licenses the well-oiled plot. The story can have a happy ending with the promise of many sequels to come.

Success stories in this field are mouth-watering: Burberry’s share price climbed from 175p in November 2008 to 1,116p at the beginning of this year as the brand went from strength to strength and reportedly attracted the attention of a number of acquirers. Lanvin has embarked on a stellar growth trajectory with plenty of potential yet to come. However, not all blockbusters have a happy ending. The latest crisis has claimed a number of victims: Christian Lacroix, Gianfranco Ferré, Yohji Yamamoto, Luella Bartley to name a few.

In this article we will examine how the traditional designer business model has come under threat and what key factors we believe are necessary to ensure the success of a luxury fashion label today. Finally we will take a look at what lies ahead for the luxury fashion sector.

Is the designer brand becoming redundant?

The traditional designer brand business model is not for the faint-hearted. Typically, a design-rich but loss-making main line is invested in with the aim of capitalising on its cachet through a cash-generative diffusion line and, eventually through lucrative licensing deals. This model not only takes years to generate returns, but the ride is also a bumpy one with no guarantee of success. Christian Lacroix is a prime example of a label which, despite heavy investment in its main line/couture business, never saw the more commercial side of its activities take off sufficiently.

Life has also been made more difficult for designer brands, initially by the proliferation of fast fashion brands with a credible fashion offering. Zara, Mango and H&M have been extremely successful at attracting the fashion conscious consumer by interpreting catwalk trends with a time to market that would make Philip Green’s head spin. H&M took this one step further by pioneering designer collaborations, which created veritable stampedes in its stores and brought new customers to the brand. Top Shop has also been a trailblazer in this category: the brand showcases its Unique collection at London Fashion Week, its collaboration with Kate Moss has given it an edge and its recent opening of a flagship opposite Harrods demonstrates that it is looking beyond its traditional high street pasture.

And finally, traditional designer labels have been challenged by — and sometimes losing ground to, contemporary brands which offer a more accessibly-priced, less fussy fashion product. In this category both a Phillip Lim, who designs his eponymous line to a price point whilst still being able to fully express himself, and a Tory Burch, with a very-well merchandised line sourced mainly out of China, have found their audience in a relatively short time and have created thriving, financially successful businesses.

It is telling that Narciso Rodriguez and Hussein Chalayan both saw their brand being returned to them by their investors, and that such a star designer as Hedi Slimane is still without a major job in the industry. What lies ahead for top designers?

Managing seasonality

Designer labels have taken major steps to reduce seasonality risk by complementing their Spring/Summer and Autumn/Winter collections with pre-collections, cruise and pre-Fall collections, thus increasing the number of collections from two to up to six per year. These inter-seasonal collections tend to contain more commercial pieces than the main collections, often have more accessible price points and now account for the bulk of sales of a fashion brand. This is also music to retailers’ ears whose aim it is to get fresh stock into stores, so as to give customers a reason to come back, and shift the stock as quickly as possible. Some luxury brands have taken a leaf out of the book of leading fast fashion players such as Inditex, introducing flash collections in their stores.

Harnessing creative talent – the increasing importance of the merchandiser

The well-publicised demise of the Gianfranco Ferré fashion house exemplifies the need for a strong merchandising function: during the early noughties development costs for its main line collection escalated to 5m euros per season, and the number of pieces produced for market stretched as far as the eye could see. The first actions of the newly-appointed CEO upon taking over the troubled company was to control collection development costs by significantly reducing the number of SKUs, the number of styles produced and of prints ordered, and to make sure that each style was able to generate profits on relatively small sales volumes.

There the model was clearly in need of an urgent fix, but on an ongoing basis the role of the merchandising team, working with the design and product teams on one hand and the marketing and sales teams on the other, harnessing the creative talent and editing down the creative output to what will work or generally help the band, is absolutely critical. This helps to ensure that the market reception of the collection will be as good as possible, but is also true — and increasingly importantly so — in a world where the number of deliveries has increased and where efficient re-ordering and replenishment is where the real money is made.

Create a bestseller but know when to let go

Whilst every management team in the industry dreams about creating that iconic product or series of products which will become a cash cow, over-dependency can prove a curse if you push this too far and the market turns on you. This famously happened to French Connection, which rode the FCUK bike from 2001 until the wheels came off, resulting in the company dipping into loss for the first time in fourteen years in the first half of 2007 (the group is now rapidly recovering under the watchful eye of its Chairman & CEO, Stephen Marks).

One interesting path is that of Burberry, which initially had to rely too much on the dual deities of trench and check but made a considerable effort to diversify its product portfolio so as to avoid being branded as a one-horse pony, and on top of that successfully fended off the chav issue (to be reviewed in detail in a forthcoming issue of our newsletter).

Invest in retail but focus on the detail!

The last crisis claimed a lot of casualties as a result of over-dependence on the wholesale channel. Pain was felt in two areas: small boutiques not paying up on their orders, or proving to be too much of a credit risk going forward, and department stores panicking and batting down the hatches. Many fashion wholesale businesses were thus caught with their pants down and had nowhere to shift their rapidly devaluing stock. At the other end, whilst the experience for retail-led fashion brands was not by any means pleasant, the effects of the crisis were less hard felt. In this respect wholesale activities played for the fashion industry the same role as leverage did relative to the financial world: it can significantly enhance returns and offers easy growth, but when the market turns, the ground is taken away from under your feet.

Beyond this point, retail presence offers a number of advantages. First and foremost the ability to capture the retail margin – a fully-integrated fashion retail business can generate gross margins up to 80 percent (and sometimes more!), as compared with a wholesale business margin of 40 to 50 percent. Retail presence also allows for more control of the brand image and presentation. This is particularly important as a brand evolves as it can often get stuck in a time warp, with retail buyers ordering variations on what sold well in the last season instead of following with new products/designs, often seen as more risky.

Whilst location is key, store size is also vital to driving store economics. The late 1990’s saw the proliferation of mega-stores as shrines to brands. Many of these were loss-making: those of you who spend time in London will remember the monolithic Jil Sander store on Burlington Gardens, intimidating by its emptiness. When Change Capital Partners took over the company, its losses were well into double-digit millions. One of the first steps the new owners took was to close a few of its most unprofitable stores – the infamous London flagship for instance was relocated to a smaller premise on Bond Street. Losses were drastically reduced, and within a year the company was profitable.

White elephants such as this previous Jil Sander store never made good retail propositions, but you could understand why some management teams were keen on them: retail really helps drive wholesale. Department store managers will never own up to it, and we are sure Barneys and Bergdorf top brass were horrified when Lanvin announced the opening of its Madison Avenue store in the summer last year, but over time (and more quickly than people think), whatever turnover is temporarily lost for the neighbouring department stores will be made up and more, as the brand benefits from increased awareness, more prestige and a stronger, more complete image as a result of its own retail presentation.

So, own retail is most definitely good — as long as you can properly evaluate its cost/reward assumptions and avoid the white elephant trap.

A dynamic supply chain can drive profitable growth

Fashion is a uniquely complex business. The supplier base is increasingly global and increasingly specialised: there is therefore no guarantee a brand will be sourcing its product from the same country, let alone the same supplier, season after season. Distribution can be equally complex, the challenge of a global distribution network being compounded by an often fragmented customer base. The fashion business model is also very sensitive to production volumes; thus the supply chain has to be continually revisited during the growth phase of a brand.

One of the cornerstones of Burberry’s success has been the investment in its supply chain. Project Atlas, an overhaul of the company’s supply chain and IT systems, was launched in 2006, culminating in the roll-out of global SAP systems in 2010. This has given it a much improved granular understanding of every phase from design to the consumer, allowing the company to react rapidly to sales trends and capitalise on bestsellers. Burberry completely re-engineered its supply chain, cutting the number of distribution centres, freight carriers and suppliers and, through improved production planning, significantly reduced the use of air freight in favour of cheaper sea freight. These measures were estimated to deliver approximately £25m in annual savings, or 14 percent of operating profit. As a result of these measures the company can now also give fast fashion a run for its money through dramatically shortened times to market.

A future dominated by men and computers?

Besides the well-documented potential in China and other emerging markets, two areas of growth merit our attention: menswear and the internet.

Despite continuing success stories such as Lanvin’s, womenswear is pretty much a saturated segment in developed markets and therefore very competitive. On the other hand the men’s market accounts for a relatively much bigger slice of the luxury pie in emerging markets. Men are notoriously difficult to attract to a brand, but as a result also tend to be very brand loyal. There are also less cultural/sartorial differences across borders in menswear than there are in womenswear. All of these characteristics make this segment worth the chase, even if traditional menswear players have to alter their offering to give more room to sportswear and casual styles, away from suiting (suits are simply worn less in emerging markets). The potential of the internet has yet to be fully harnessed by luxury fashion players.

Richemont’s recent investment in Net-a-Porter (and the valuation the investment commanded) confirms the perceived potential of this medium. Burberry is ahead of the curve in this category — its Facebook page has the largest following of any luxury brand, its social media website www.artofthetrench.com is streets ahead of competition and it was the first brand to sell runway items from its Autumn/Winter 2010 show direct from the webcast to consumers. The potential for volume and margin in this area is huge — the only cloud on the horizon being the high level of returns (around 40 percent) creating a working capital headache.

Let fashion do what fashion does best….re-invent itself

The designer brand model in its purest sense has probably had its heyday. However, just as we thought we’d never see shoulder pads again when Joan Collins’ flamboyant character Alexis Colby left our screens, with a few alterations here and there they are back with vengeance. We should expect no less from the designer fashion business.

Pierre Mallevays is Founder and Managing Partner and William Plane is Director of Savigny Partners, a boutique advisory firm focusing on specialty retail and aspirational brands

Henri Bendel Holiday 2010 Catalogue | Source: Henri Bendel

US department stores gain Black Friday traffic (Reuters)
“U.S. shoppers spent 6.4 percent more this Black Friday weekend than last year and hit department stores and clothing shops, rather than focusing on discounters as they had done in recent years.”

Christmas shoppers stung by early price hike (Telegraph)
“An investigation has revealed Christmas shoppers are being stung by rises of up to 26 per cent on gifts such knitwear as retailers bring forward price increases linked to the soaring cost of cotton.”

H&M Says Lanvin Collection Performing Well (Bloomberg)
“[H&M] said a temporary collection from French designer Lanvin introduced this week has posted strong sales in countries including China and Russia. Customer reaction has been ‘extraordinary’ in China, Canada, the U.K., Italy and Russia.”

Needleman’s Newbie (WWD)
“The New York media world will finally begin to size up a new magazine war in town: Deborah Needleman’s WSJ. Magazine vs. Sally Singer’s T: The New York Times Style Magazine.”

The Making of Fashion’s Latest ‘It’ Girl (NY Times)
“She’s a hipster muse for Karl Lagerfeld; a regular on the pages of fashion and music magazines; and an inspiration for young bloggers…’She’s become the Kate Moss for this new generation.’”

Canal Street AF1, created to drive counterfeit awareness | Source: Kicks on fire

Copyrighting Fashion: Who Gains? (NY Times)
“Paradoxically, the payoff from free copying has been enormous.  The fashion cycle turns faster, and the industry gets richer – and creates new designs more frequently. So why on earth would anyone want to change that?”

Luxury brands wrest back China market, eye smaller cities (Reuters)
“Many piled into China over the last decade, pairing with re-sellers and joint venture partners, but with so much at stake, they are severing these ties and bringing their own considerable financial and marketing muscle as well as expertise to China.”

Lanvin to Make Clothes for H & M (NY Times)
“Lanvin, one of the oldest Paris fashion houses, announced today that it will do a collection this fall for H & M. People can have their first look at the collection on Nov. 2, in a film that will be shown on hm.com. The clothes will go on sale Nov. 23 in 200 H & M stores worldwide.”

Esprit to Double China Sales After Decline in European Revenue (Business Week)
“Esprit Holdings, the biggest Hong Kong-listed clothier, aims to at least double China sales in the next five years after reporting an 11 percent drop in full-year profit. The stock fell the most in three months.”

Should John Lewis revamp their fashion? (Telegraph)
“The department store has just announced a revamp – the word alone will send a shiver down the spines of its fans – with the aim of becoming genuinely fashionable. Why on earth does Britain’s Favourite Retailer need to get groovy?”

Scarlett Johansson for MNG at J.C. Penney | Source: Nitrolicious

Penney Weaves New Fast-Fashion Line (WSJ)
“J.C. Penney Co. is going to try running with a faster crowd.  [Unveiling] an unconventional collaboration with Mango, the closely-held Barcelona chain known for whipping up cutting edge looks that go from design studio to store shelves in as little as four weeks.”

Societies May Fall, but Prices Do Not (NY Times)
“What surprises most when entering Lanvin’s new three-floor shop on Madison Avenue is how packed with merchandise it is, and how intime it feels. At barely a month old, it already evokes a feeling of having been lived in.”

Discovering Hats (WSJ)
“Gap and J. Crew say they have witnessed strong hat sales this spring and summer while department stores like Barneys New York have been expanding their assortments after years of general indifference to hats.”

American Apparel warns of likely sales drop, loss (LA Times)
“Troubled clothing firm American Apparel Inc. said Tuesday that its second-quarter sales probably fell compared with a year earlier and that it expected to report a loss.”

Things my mentor taught me (FT)
“Starting a business can be lonely and prone to failure – which is why many entrepreneurs take advice from those who have done it before. Five business founders speak about the people whose advice they valued.”

Pierre Mallevays of Savigny Partners | Source: Savigny Partners

Today, BoF brings you an exclusive interview with a key adviser to the private family trust which, as announced today, made an investment in Lanvin, one of the hottest fashion brands in the world.

PARIS, France — Over the past few years, under the creative stewardship of industry darling Alber Elbaz, Lanvin has risen to heights that most fashion brands can only dream of, with nearly unanimous positive reviews from buyers and editors and a seemingly insatiable appetite amongst luxury fashion customers for Lanvin’s clothes, accessories and jewelry.

There was only one problem. After having invested significant sums early on, Shaw-Lan Chu-Wang, who purchased Lanvin from L’Oreal in 2001, was not injecting any more cash to grow the business. This left Lanvin’s hyper industry buzz and brand potential underexploited.

Not anymore. Today, in a press release issued by Lanvin (and as reported in WWD), it was announced that Arpège, the brand’s parent company, has received a cash injection for a minority investment representing 12.5 percent of the equity. The investment was made with a “long-term” view, apparently an indication that the investor does not plan to flip the investment for a quick profit. This is a refreshing change from some of the disastrous investments we have seen in fashion brands in recent years.

I spoke with Pierre Mallevays who advised the private family trust on their investment in Lanvin to learn more about the dynamics of the deal and the fashion and luxury market in general. Pierre is a friend and colleague, and one of the leading investment experts in the luxury space, first having worked as Head of M&A for LVMH for over seven years, and now as Managing Partner of London-based Savigny Partners, a boutique M&A advisory firm.

BoF: There have been a flurry of new transactions (or potential transactions) announced in recent weeks, including those of Escada, Lacroix, and now Lanvin. Is the luxury M&A market turning a corner?

Yes, absolutely. The Escada deal is at the tail-end of the distressed transactions brought about by last year’s crisis, just like the Lacroix deal. But the significant rise of stockmarket levels since May this year has reduced the valuation gap between buyers and sellers. The M&A market came out of hibernation some time in September– deals are doable again.

BoF: After record valuations multiples of up to 13x EBITDA or more on transactions like Permira’s acquisition of Valentino and Towerbrook Partners’ investment in Jimmy Choo, are luxury investors today investing any differently, say with more reasonable expectations about valuations, returns and timing of exit?

You are right again. Private equity embraced the world of luxury goods with the view that there would be no end to the good times, spurred on by a solid economy generating an ever growing number of wealthy customers and seemingly endless reservoirs of growth in China and India. A lot of investors have been burned, and the mood is now all about opportunity investing as opposed to sector enthusiasm. A case in point is Brioni, a very good and pure play brand with excellent growth prospects, which allegedly failed to find a minority investor at a rumoured 10X EBITDA multiple.

BoF: What was the rationale for Lanvin to take investment from a private investor rather than a strategic partner from a major luxury goods group?

With Alber Elbaz at the creative helm, Lanvin has seen truly extraordinary critical and commercial success and, having turned profitable last year, is finally experiencing financial success as well. Why would Mrs Wang, who nurtured the company to success from the brink of bankruptcy, want or need to sell out to a major luxury goods group? Between her and Alber, Lanvin is a family of two. The family has just taken on a third member, a family trust itself, with a similar long-term mind.

BoF: When considering taking an investment, what are the three most important things a brand should consider?

Exit, exit, and exit. The agreed exit strategy (or lack thereof) is the natural pendant to the potential investor’s motives in making the investment in the first place. Too much time is generally spent on planning the first years of living together and not enough on exit scenarios. For the brand receiving the investment, it is very easy to get blinded by the need for cash or the potential for synergies.

BoF: Do you foresee any oft-speculated industry changing transactions actually coming to pass, like the acquisition of Hermès, Chanel or Armani, or the IPO of Prada?

While newsworthy, I don’t think the shareholder succession at Armani or perennially potential IPO of Prada would be industry transforming events. The Armani empire is a super tanker which is unlikely to change course easily, and the Prada IPO is a financial sideshow – what really matters there is the continued presence of the Miuccia Prada-Patrizio Bertelli dual engine.

The real industry changing events would be the acquisition of Hermès or Chanel, who are better guarded than Fort Knox, or of the Richemont group, and I don’t see signs of that either!

Imran Amed is Editor of The Business of Fashion

CEO Talk is an ongoing series of discussions with fashion entrepreneurs and business leaders. Previous interviews are listed below:

• Natalie Massenet, Chairman and Founder, Net-a-Porter
• Camilla Skovgaard, Shoe designer and Entrepreneur
• Susan Lyne, Chief Executive Officer, Gilt Groupe
• Priya Kishore, Founder and Creative Director, Bombay Electric
• Alex Bolen, Chief Executive Officer, Oscar de la Renta
• Jeffrey Kapelman, Chief Executive Officer, Hilldun Corporation
• Bonnie Takhar, Chief Executive Officer and President, Halston
• Sara Ferrero, Chief Executive Officer, Joseph Group
• Paolo Fontanelli, Chief Executive Officer, Furla
• Stella Iishi, President and Founder, The News Inc.
• Greg Furman, Founder and Chairman, Luxury Marketing Council
• Sarah Curran, Founder and Chief Executive Officer, my-wardrobe.com
• Brian Hill, Chief Executive Officer, Aritzia
• José Neves, Founder and Chief Executive Officer, farfetch.com
• Federico Marchetti, Founder and Chief Executive Officer, YOOX Group
• Sojin Lee, Co-Founder, Fashionair.com
• Harold Tillman, Chairman, The British Fashion Council
• Christopher Colfer, Chief Executive Officer, Alfred Dunhill

Lanvin, Dior, and Paul Smith S/S 10, courtesy of men.style.com

Paris menswear week winds down with Dior, Lanvin (AP)
“The French capital’s spring-summer 2010 menswear displays wound down Sunday with a harder-than-usual silhouette from romantic label Lanvin, a retro rocker at British dandy Paul Smith and a sheer, shorn look at Dior Homme.”

ASOS says trading robust as profit doubles (Reuters)
“British Internet fashion retailer ASOS Plc posted an expected 93 percent rise in year profit and said current trading was robust, boosted by strong demand for jumpsuits, boyfriend blazers and marble wash denim.”

Why retailers are launching retro collections (FT)
“While fashion has been plundering its own history for years, these days it’s not just the designers who are having a renaissance. Designs of long-ago are, too.”

Ready to Wear: Is it fair to lambast such an innovative designer? (Guardian)
“Balenciaga’s Nicolas Ghesquière has once again came under scrutiny online as bloggers point out that a patchwork leather jacket from his 2010 resort collection shown in New York earlier this month bears an uncanny resemblance to a ‘parrot’ jacket, courtesy of East West Musical Instruments that operated in San Francisco during the Sixties and Seventies.”

Karl who?

PARIS, France – We don’t actively engage in the rumour mill here on BoF, but when the whispers involve Karl Lagerfeld, Olivier Theyskens and Alber Elbaz in a Lanvin and Chanel merry-go-round, it seems worthwhile to engage in a bit of Friday afternoon fashion speculation.

Today, Diane Pernet has published a bombshell post outlining this scenario:

“This is not a fact until you officially read it somewhere else but rumour has it that Karl Lagerfeld will not renew his contract at Chanel and that Alber Elbaz will take his place and Olivier Theyskens will take Alber’s place at Lanvin…Nothing is engraved in cement, these are still just rumours you will have to wait and see.”

Of course, fashion observers have long wondered what will happen at Chanel (and Fendi, for that matter) when Lagerfeld’s seemingly endless energy finally runs out. For Elbaz, or any top fashion designer for that matter, the Chanel post would be a dream job as it is one of the most coveted design roles in the fashion world.

That said, this all seems a bit suspect to me. And as Diane says, these are only rumours.

Word has it that Elbaz has a significant ownership stake in Lanvin, making it hard to believe that he would walk away from all that upside, especially now that sales at Lanvin are up 29 percent and the brand is on the ascendant, even in the current economic environment. What’s more, private equity and strategic investors have been circling the buoyant French brand for months now, and there is potentially a big payout to be had for Mr. Elbaz–but only if he sticks it out and, I suspect, only if he stays on as Creative Director.

In other revolving designer news, WWD is reporting today that Esteban Cortazar is the latest designer to clash with Mounir Moufarrige at Ungaro, prompting the young designer to walk out of his role. This will not come as a surprise to long-time readers of The Business of Fashion. When Cortazar was first appointed, a raging debate took place about his suitability for the role and about Moufarrige’s apparent inability to effectively work with top creative talent. If the news of Cortazar’s departure are true, this will be the third designer to walk out on Moufarrige: Giambattista Valli, Peter Dundas and now, Esteban Cortazar.

UPDATE: As expected, both Chanel and Lanvin have denied these rumours and so, alas, Karl Lagerfeld and Alber Elbaz are both staying put. For now.

Imran Amed is Editor of The Business of Fashion

Donatella Versace and Giancarlo Di Risio, courtesy of the Wall Street Journal

Bucked by Designer, Versace CEO Eyes Exit (WSJ)
“Gianni Versace SpA Chief Executive Giancarlo Di Risio is expected to resign, a person familiar with the matter said, after months of clashes with lead designer Donatella Versace over how to cut costs at the Italian fashion house.”

Lanvin Posts Profit, Sales Gain 29 Percent (WWD)
“Lanvin, fueled by the creativity of Alber Elbaz, can face the economic crisis “in a healthy way,” said executive vice president Thierry Andretta.” (Subscription required)

Business Journals to relaunch Portfolio.com (BizJournals.com)
“Portfolio.com will migrate to a new home as part of Charlotte-based American City Business Journals Inc.’s bizjournals, effective in July.”

Management rejig at New Look + video of first TV ad (Drapers)
“New Look has promoted Will Kernan to group managing director (owned stores), overseeing its entire network of company-owned stores.” (click here to view the ad)