Fourth option for Carven backed by former Balmain CEO Emmanuel Diemoz
today Aug 21, 2018
Carven’s senior management has not given up yet. The French fashion label, owned since 2016 by Hong Kongese investment fund Bluebell, with Henri Sebaoun as a minority shareholder, filed for receivership last May. While, as reported by FashionNetwork.com in early July, three acquisition offers were filed with the Paris trade court, work is also being done on a new, credible recovery plan. According to our sources, this project is still being led by Sophie de Rougemont, and it involves a new financial and strategic partner, former Balmain CEO Emmanuel Diemoz, with whom Carven’s current top management is trying to put together a rescue operation for the label.
Diemoz left Balmain in spring 2017, eight months after the Parisian label was taken over by Mayhoola for Investments, the investment fund controlled by the Qatari royal family. Emmanuel Diemoz was intimately involved with Balmain’s spectacular recovery, being one of its main instigators. He joined Balmain in 2000 and worked closely with the former board chairman, Alain Hivelin, first as CFO and then, from 2012, as General Manager. Together, the two businessmen managed to relaunch Balmain, which had been declining gradually ever since the death of its eponymous founder in 1982. In 2004, Balmain had even filed for bankruptcy, before enjoying a new lease of life first between 2006 and 2011, under the aegis of designer Christophe Decarnin, and then thanks to Olivier Rousteing’s glam, sexy style and his media and networking savvy.
Indeed, Emmanuel Diemoz has had first-hand experience in managing both a crisis and a period of rapid growth. He was involved in growing Balmain’s revenue from less than €30 million at the start of the 2010s to a business more than four times the size in 2017, giving Olivier Rousteing the resources to express his talent and promote Balmain on social media in order to win over an international clientèle.
Diemoz seems to think that Carven now has some of the assets needed to enjoy this kind of success. To do so, the first challenge for the new leadership is to convince the trade court that Carven’s recovery plan is robust and durable. For the time being, the parties involved have given no indication as to the intentions of the Bluebell group, which owns two thirds of Carven’s equity since 2016. In terms of figures, according to the official documents obtained by FashionNetwork.com, when Carven filed for receivership the revenue for 2017 was €21.5 million, with liabilities for €40 million, of which €5.5 are account payables, in other words existing debts coming due. The company had 103 employees.
Besides this information, we were able to obtain the details of the tenders filed with the Paris trade court last July. As we previously reported, the most convincing offer was put forward by Jacques Bogart, since 2010 the owner of Carven Parfums. In a two-page document, the latter mentions its fashion know-how acquired with Ted Lapidus and, especially, how it relaunched Balenciaga hiring Nicolas Ghesquière, before selling the label to Gucci.
Carven Parfums is led by David Konckier and, in the 2017 financial year, it reported a revenue of €130 million, chiefly from fragrance, beauty and fashion. The group explained in its tender that it has “been approached by many potential candidates asking to work with them to either sell or take over [Carven]. The parties involved and the potential buyers are all well aware of the brand’s interest in uniting [Carven’s] fashion business with that of perfumery, as the latter is growing strongly and profitably thanks to our efforts.”
It is clear that Jacques Bogart is talking to all the players involved. One question is whether Carven Parfums would take part in the relaunch operation planned by the label’s current management with Emmanuel Diemoz. On this, none of the interested parties responded to our queries.
Nevertheless, Carven Parfums does not envisage letting the fashion label fade into oblivion, as it could be worth a minimum of €5 million. FashionNetwork.com learned from Bogart’s tender that the fragrance group has put forward “an acquisition offer relating for the time being to the brands alone, notably Carven, in the form of a divestment plan should the current negotiations not be brought to fruition. The proposed selling price for the brands is €1.5 million, payable on the day of the sale.”
In other words, a partial acquisition offer to keep control of the brand name should the fashion label seriously risk bankruptcy. Another partial acquisition offer was put forward by French wholesaler Philippe Métivier, who offered €30,000 to buy the lease of the label’s Parisian stores in rue de Grenelle, rue Saint Sulpice and rue Malher. The offer also involves taking on 15 store employees with open-ended or fixed-term contracts. It is worth noting that Carven’s store in rue de Sévigné has already found a buyer, and Levi’s is working on opening its first Parisian womenswear store there.
Finally, the third tender was filed by French company Cashtex, led by Daniel Levy. It offers to take over Carven’s brand names, trade names, licences and patents, as well as the leases, stock and employee contracts for the sum of €500,010. Cashtex intends to “relaunch the brand starting from a streamlined, more manageable organisation.” It would keep 50 jobs and reclassify another 39, and it forecasts a revenue of €15 million for the first year in business, reaching €20 million two years later, while remaining profitable.
In the next few weeks, the Paris trade court will decide which proposal it favours. Unless of course a new, last-minute tender will change the situation. The deadline for filing an acquisition tender as part of a divestment plan has been pushed back to September 7.
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