UPDATE 2-LVMH invests in Italian brand Marco de Vincenzo
(Recasts with LVMH confirmation, adds detail)
By Astrid Wendlandt and Isla Binnie
PARIS/MILAN Feb 24 (Reuters) - French luxury group LVMH on Monday unveiled a joint venture with Italian fashion brand Marco de Vincenzo as part of its strategy to gain exposure to young and potentially fast-growing fashion labels.
LVMH will take a minority stake of about 45 percent in the ready-to-wear brand of the Italian designer who has been working for Fendi, one of LVMH's fashion brands, for 13 years, a source close to the deal said.
Karl Lagerfeld, Chanel's artistic director since 1983, is still Fendi's artistic director. But the brand has served as a training ground for many designers over the years including Frida Giannini, today's chief designer at Gucci, and Valentino designers Maria Grazia Chiuri and Pierpaolo Piccioli.
The transaction, estimated at 10 to 20 million euros ($13.7 million to $27.5 million) - pocket money for LVMH, which generates annual free cashflow of nearly 3 billion euros - is spearheaded by Delphine Arnault, daughter of LVMH Chief Executive Bernard Arnault and deputy head of the group's flagship brand Louis Vuitton, the source added.
"This new partnership is in the DNA of LVMH, which has always supported young designers," Delphine Arnault said in a statement.
Last year, the world's biggest luxury group invested in young French designer Maxime Simoens and English designers J.W. Anderson and Nicholas Kirkwood.
Rival Kering, owner of Gucci and Yves Saint Laurent, has been pursuing a similar strategy, buying stakes in fledgling fashion brands such as Christopher Kane and Joseph Altuzarra.
As demand for mega-brands such as Louis Vuitton and Gucci flattens out, big luxury groups are on the prowl for tomorrow's next big brand and spreading their bets by investing in many different labels.
Marco de Vincenzo, 34, known for his use of bold colours and innovative fabrics and designs, has been showing his ready-to-wear line at Milan fashion week since 2009 after winning Vogue Italia's "Who is on Next" fashion design competition.
Monday's deal was first reported by fashion trade publication Women's Wear Daily on Sunday.
Pietro Beccari, chief executive of Fendi, declined to comment. ($1 = 0.7275 euros) (Editing by Natalie Huet and David Goodman)