Kering in talks to sell Christopher Kane his eponymous brand
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Kering in talks to sell Christopher Kane his eponymous brand

French Luxury titan Kering is in talks to sell its 51% stake in Christopher Kane back to the British designer who gave it its name. This wouldn’t end collaboration between the two, but it would signal the end of a five-year partnership that plays into the conglomerates other recent moves, such as selling off a selection of its brands, some of which – like Stella McCartney – went back to their founders. Christopher Kane looks to be the next.

Kering’s share price has risen by 32% year to date

graph 2506 kering

SOURCE: Yahoo Finance

In a statement, the company said: “Kering is announcing that discussions are underway with Mr. Christopher Kane about the conditions in which the British designer could take back full control of the eponymous brand. Christopher Kane and Kering wish to continue to collaborate with the aim of achieving a gradual and harmonious transition.”

Christopher Kane, a graduate of London’s prestigious design school at Central St. Martins, founded his brand in 2006. It quickly grew into a respected label. However, since Kering purchased a controlling stake in 2013 for an undisclosed sum, growth has stalled. After generating £6.97 million in the year of the acquisition, revenue had only risen to £7.8 million three years later.

This is the latest move by Kering to jettison those businesses that it feels either don’t belong with its top-end luxury vision (think Puma) or it hasn’t managed to transform into luxury powerhouses. The strategy will see it continuing to collaborate with designers like Kane and McCartney while nonetheless focusing on its remaining portfolio of pure play luxury companies (think Gucci, Saint Laurent, and Balenciaga). It’s a bold strategy, and in 2018 so far, it’s been met with success and acclaim from investors and fashionistas alike.

Disclosure

Dominion holds Kering in its Global Trends Luxury Fund.


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