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By Astrid Wendlandt
PARIS Oct 16 Swiss luxury group Richemont
is informally looking for potential buyers for its
fashion brand Chloe and received a non-binding offer this month
from private equity firm Change Capital for leather goods maker
Lancel, sources close to the matter said.
The disposals are part of Richemont's most important
strategic turnaround in more than a decade as the world's second
biggest luxury group focuses on its watch and jewellery brands,
including Van Cleef & Arpels, Lange & Soehne and Cartier.
Richemont said earlier this year it would offload poorly
performing businesses which analysts took as a sign the group
was finally ready to sell brands such as Lancel.
Several sources close to Richemont said the group was also
considering offloading watch brand Baume & Mercier.
Regarding the sale process of Chloe, for which advisers have
not yet been retained, one of the sources said: "It is not a
question of if but a question of when."
Several sources said Lancel would be a difficult brand for
Richemont to sell and Change Capital Partners had made a bid
because of its experience turning around businesses.
"Change Capital made a non-binding offer," one of the
sources said. Change Capital and Lancel declined to comment.
Change Capital is a private equity firm set up by Luc
Vandevelde, the former Carrefour and Marks & Spencer
Chairman, which owns a majority stake in French
ready-to-wear brand Paule Ka and previously invested in Jil
The sprawling Asian conglomerate Swire, the largest
shareholder in airline Cathay Pacific and distributor of brands
Repetto, Chevignon and Columbia in Hong Kong and mainland China,
is looking to team up with a private equity firm to make a bid
for Lancel, the sources added.
Swire would be keen to acquire a minority stake in Lancel to
handle its distribution in Asia, the sources said. No-one at
Swire could be reached for comment.
Earlier this year, Swire and French private equity firm
Eurazeo bid for fashion brands Sandro, Maje and Claudie Pierlot,
which were sold to KKR, valuing them at 650 million euros.
A number of private equity firms, including Permira, PAI
Partners and Eurazeo, attended a presentation of
Lancel last month but declined to make a bid after taking a
close look at the company's books, the sources said.
Other interested parties sent information on Lancel but did
not bid include private equity firm Apax as well as Fung Brands,
the investment vehicle of Hong Kong billionaires Victor and
William Fung that owns Sonia Rykiel, Cerruti and Delvaux.
The sources said they expected Lancel could fetch a
valuation of about one time its annual sales while a separate
source close one of the funds that declined to make an offer for
the brand estimated that it would require an initial investment
of at least 50 million euros to restructure the company.
Lancel's sale process follows the abrupt departure last
spring of Marty Wikstrom who headed Richemont's fashion and
A spokesman for Richemont said Bernard Fornas, Cartier's
ex-CEO and now the group's co-chief executive, was now in charge
of the businesses but he declined to comment on the sale
Lancel made an operating loss of 10 million on revenue of
135 million euros in the year to end-June 2013, one person with
first-hand knowledge of the matter said, adding that these
numbers were pro forma, or retreated by the group for the sale.
Lancel, which has seen at least 10 chief executives since it
was acquired by Richemont in 1997, suffers from a lack of clear
market positioning and strategic direction, sources said.
The brand recently has had to destroy millions of euros
worth of unsold bags and many of its shops abroad are losing
money, the sources said. Richemont does not publish separate
figures for its fashion and leather brands.
(Reporting by Astrid Wendlandt, editing by Geert De Clercq and