* Fung Brands buys 80 pct stake
* Rykiel family retains 20 pct
* Nathalie Rykiel stays on as Vice Chairman
* Says time to end family-controlled business model
By Astrid Wendlandt
PARIS, Feb 21 (Reuters) - Sonia Rykiel, the Parisian fshion brand known for brightly coloured striped woollen outfits, has sold control to Hong Kong investors to give it the financial firepower to enter major markets such as China and the United States.
Fung Brands, an investment company backed by Hong Kong billionaires Victor and William Fung, is acquiring 80 percent of Sonia Rykiel, with the founding family retaining a 20 percent stake. Financial terms were not disclosed.
Alongside Hermes, Sonia Rykiel was one of the last French fashion luxury brands still to be owned by its founding family.
Most major French fashion brands are either part of LVMH , PPR or Richemont, or controlled by industrial, financial or foreign investors.
“We had to open our eyes to the fact that we had come to the end of our family (business) model,” Nathalie Rykiel, daughter of founder Sonia Rykiel and chairwoman of the company, told Reuters in a phone interview on Tuesday.
“I took the brand as far as I could alone. But the family needed the financial, strategic and human resources to make this brand what it was destined to become, which is a global brand.”
She said Fung Brands would give it the means to expand in Asia and North America, open more shops and have a bigger advertising budget.
Sonia Rykiel was created in 1968, when France was rocked by violent student riots, with the aim of creating a counter-culture to stiff, bourgeois dress codes with inside-out stitches and extra-short skirts. Later, it produced sex toy collections.
Rykiel said several potential buyers had shown their hand, including big groups, but she chose to shock once more by selling control to Hong Kong investors.
“That one of the last family-owned French luxury brands lets Hong Kong investors come into its capital amuses me a lot,” she said. “And I prefer to be the flagship brand of a company like Fung Brands than just one of many brands within a large group.”
Sonia Rykiel will sit alongside shoemaker Robert Clergerie and Belgian fine leather goods maker Delvaux, both acquired by Fung Brands last year.
Nathalie Rykiel, who will be vice chairman, will give up the day-to-day running of Sonia Rykiel, leaving it to Fung Brands Chief Executive Jean-Marc Loubier, a fashion veteran who used to run luxury brands Celine, Louis Vuitton and Escada.
The Fung family is behind the Li & Fung trading house , which is the parent of Hong Kong-based luxury menswear maker and distribution group Trinity, in turn the owner of Italian menswear brand Cerruti since 2010.
Loubier said he planned to revamp Sonia Rykiel’s product portfolio, expand its leather goods offer and make it more accessible to foreign buyers with a different approach to fashion than Parisians.
But he wanted to preserve the brand’s identity, which fashion observers describe as irreverent and non-conformist and which chimed with the spirit of the Saint-Germain des Pres district of Paris famous for its writers’ meetings at cafes and where the brand is still headquartered.
“This brand’s (style) codes are very rich,” Loubier told Reuters in an interview. “It has a status (in terms of fashion notoriety) which does not correspond to its worldwide presence. It has extraordinary potential.”
While many luxury fashion brands have enjoyed sales growth of above 10 percent in the past two years, Sonia Rykiel has seen revenue stagnate even though it regularly gets rave reviews from fashion critics.
In 2011, revenue remained at around 90 million euros ($119 million), as in 2010, and the company was at break-even.
Loubier said the brand would continue to hold fashion shows and that Scottish-born April Crichton, who officially became Sonia Rykiel’s creative director in September after many years at the house, would remain in her post.
Loubier said Fung Brands would also continue to look for other investment opportunities.
The Sonia Rykiel company includes four lines: its high-end ready-to-wear line Sonia Rykiel, its cheaper and more youth-oriented Sonia by Sonia Rykiel, its children’s line Rykiel Enfant and home furnishings line Sonia Rykiel Maison.
Sonia Rykiel employs 365 people and distributes its products through 65 of its own boutiques and nearly 2,000 other stores in more than 30 countries. ($1 = 0.7538 euros) (Editing by David Cowell)