The man who launched the futuristic style of fashion has revealed that his company is up for sale. Neither is it the first time. Pierre Cardin, he of the space-age fashions, has announced that he is looking to sell his company. The reason being that he wants the business he built so painstakingly to continue after him. At 88 years of age, Cardin is one of the older designers manning big luxury brands in the fashion industry. He is not alone – but Karl Lagerfeld of Chanel and Giorgio Armani are considerably younger, being in their seventies. The Venice-born Cardin definitely needs to get his succession plans in order.
Some years ago, Cardin had attempted to sell his brand at €500 million. That did not work out, but Cardin seems more serious now. And his current asking price is €1 billion (about $1.46 billion). However, industry experts do not seem too convinced about the price. Many would say that $200 million is a more justifiable amount. But there is no way of saying exactly how much the company is worth. There is simply not enough available financial information. Ex-LVMH executive Pierre Mallevays suggests that the asking price should be about four times the company’s sales. But there is no clarity about the sales figures either.
It does not help that the company’s sales comes from 400-odd license partners across the world. Even Cardin does not know how much the company makes each year. Mallevay admits that one of the big obstacles to selling the luxury brand at a high price has to do with the degree of diligence it will require to manage the brand.
At the same time, Cardin’s decision to sell his company could not have been timed better. Earlier this March, when luxury conglomerate LVMH Moet Hennessey Louis Vuitton bought Italian jewelry house Bulgari SpA for a ridiculous amount, it was an indication that things were on the upswing. The fashion industry seems to be in acquisition mode, and valuations look set to hit the roof.
The problem is that Pierre Cardin has his fingers in so many pies that his French fashion line has lost out. His futuristic clothing and androgynous designs have inspired the likes of Alexander Wang, but Cardin himself has only one clothes boutique left. His linear dresses and pants in out-of-the-box fabrics like plastic were once all the rage. Now, the fashion designer seems to have few takers. Last fall, his runway show at the Paris Fashion Week attracted hardly any buyers or top fashion editors. The collection itself lacked the earlier Pierre Cardin precision.
His 400 licensees sell everything from crockery to toilets to heaters. Cardin claims that profits from his subsidiaries have been on the rise, but there is no hard data to prove as much. Moreover, at a time when other fashion brands cut down on diverse licensing, Cardin is an example of how it can go extreme. Financially speaking, the designer has done well for himself. But his company is nebulous. And the fashion bit is lost in the crowd of other products. Meanwhile, Cardin is unwilling to retire. Even if someone buys his company, he wants to stay on as creative director.