Nicholas Kirkwood and LVMH split, shoe designer takes back ownership
LVMH is parting ways with luxe shoe label Nicholas Kirkwood after seven years with Kirkwood taking back control. It’s the latest smaller luxury brand that had been taken on during the sector’s boom years that a luxury giant is now exiting, although the French group will continue to support the British brand for the rest of 2020. This will allow for a smooth transition and the parting is said to be amicable and a mutual decision.
The split follows Kering exiting its Christopher Kane stake in 2018 as it focused on its larger power brands.
This is a rare move on the part of LVMH, which is also in the news for calling off its agreed deal to buy Tiffany. But it highlights the importance of conglomerates putting maximum resources behind mega names such as Dior, Fendi and Louis Vuitton in times of intense pandemic-linked pressure. It had previously only sold two brands, Christian Lacroix 15 years ago and Donna Karan International in 2016.
So what was the issue with Nicholas Kirkwood? The brand, known for its pearl-studded heels, seemed unlikely to ever become a portfolio star and its accounts filed at Britain’s Companies House showed mounting losses. Its figures for 2019 showed turnover down to £8.1 million from £11.2 million, a tiny amount compared to the massive revenues LVMH’s top brands generate. The accounts also showed the operating loss widening to £3.3 million from £2.4 million. Meanwhile, the net loss was £3.5 million, bigger than the £2.5 million reported for 2018.
The Central Saint Martins graduate launched his brand in 2005 and LVMH took a controlling stake in 2013. The label has ramped up its e-tail operations since then, also opening a store on London’s luxury-focused Mount Street and diving deeper into sustainability.
But the lockdown is likely to have hit it hard with footwear being a particularly tough category to sell, even online, at a time when shoppers globally are rarely setting foot outside their front doors.
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