Business

Kering Is Definitely Selling Its 50% Share Of Stella McCartney Back To The Namesake Designer

By Donovan | February 24, 2018 0 Comments

PARIS — DM Fashion Book could officially confirm our originally story that French luxury conglomerate Kering is selling its 50% share of Stella McCartney back to the namesake designer (see the original story here). BoF reports, “a formal transition process already in motion, according to a source with first-hand knowledge of the matter“.

“The public announcement, originally slated for early January, is imminent“, according to a source with first-hand knowledge of the discussions.

According to the source, “the Stella McCartney HR team is preparing a booklet outlining the details of the separation to answer outstanding questions and ease employee concerns. However, both parties issued a joint statement saying nothing has been confirmed.”

“Kering and Ms Stella McCartney have been operating and growing the Stella McCartney brand since 2001 as a 50/50 joint venture. As already stated, as it is customary between stakeholders, there are regular discussions about the future of the partnership,” Kering and Stella McCartney said. “Any significant change to the current relationship would be made public at the appropriate time. Any piece of information circulating to this respect can only be considered as speculation.”

“To be sure, unravelling the partnership will be a time consuming, expensive process. (McCartney’s father, musician Paul McCartney, has had a role in financing the buy-back from Kering, said the source, though this could not be independently confirmed. A spokesperson for McCartney said her father has never been involved with the business.)”

According the source, “Kering’s brands will be forbidden from hiring Stella McCartney employees during the transition process, which could take as long as two years. London-based retail strategy consulting firm Javelin, part of global advisory firm Accenture, is working with Stella McCartney to reorganize during the transition period, creating a blueprint for the newly independent Stella McCartney business.”

Currently there is no exact reason on why Kering and Stella McCartney are splitting, but we’ve heard that Kering is streamlining its portfolio and focusing its attention on blockbuster brands including Gucci, Saint Laurent and Balenciaga.

Last November 2017, we reported that Kering was set to sell Puma for almost $7 billion (see it here). Kering also owns Yves Saint Laurent, Gucci, Alexander McQueen, Balenciaga, Puma, Brioni, Christopher Kane and other brands.

Stella McCartney launched her namesake label in 2001 as a joint venture with the Gucci Group (once a subsidiary of what is now known as Kering), at the time run by chief executive Domenico De Sole and Tom Ford, who designed both Gucci and Yves Saint Laurent. (McCartney joined from Chloé after a short but well-received stint as creative director.) Alexander McQueen joined the group in 2000.

Kering does not break out the revenues of its smaller houses, although in 2015, market sources estimated that Stella McCartney’s annual global sales were somewhere between $150 million and $200 million. However, the annual retail value of Stella McCartney products is likely significantly more thanks to branded collaborations with Procter & Gamble for beauty (including a hit fragrance business), Adidas for activewear and Bendon for lingerie. Her collection with Adidas, first launched in 2004, has become a brand in itself. McCartney then launched menswear in 2016.