Analysis predicts that Isabel Marant's sales exceeded 200 million euros last year, and EBITDA was around 50 million to 60 million euros. Luxury consumption continues to heat up. Capri Group, which owns Michael Kors, Jimmy Choo and Versace, may launch new acquisitions.
According to Bloomberg, citing people familiar with the matter, Capri Group is one of the potential buyers of French designer brand Isabel Marant. The latter’s holding company, French private equity fund Montefiore Investment, is studying with JPMorgan Chase a plan to sell a controlling stake in Isabel Marant, which is expected to allow Isabel Marant is valued at 1 billion euros.
Founded in the 1990s by the eponymous label, Isabel Marant is known for its bohemian style and application of ethnic prints such as Indonesian batik, initially focusing on womenswear before launching a menswear collection in 2017. A frequent visitor to Paris Fashion Week, Isabel Marant products priced around $1,000 are considered affordable luxury.
In 2016, Isabel Marant himself sold 51% of the brand's equity to Montefiore Investment, while himself and his two assistants Nathalie Chemouny and brand general manager Sophie Duruflé retained the remaining 49% of the equity. At that time, Isabel Marant's annual sales were about 150 million euros, 80% of which came from outside France.
Last September, Isabel Marant suddenly announced Dutch designer Kim Bekker as its first-ever art director. Kim Bekker will oversee Isabel Marant's womenswear and menswear collections, after the brand's menswear was under designer Barnabé Hardy.
According to the data, Kim Bekker has joined the brand studio for more than ten years. He has also worked in Chloé and Saint Laurent. He has extensive relevant experience and is regarded as the best successor to the designer of the same name. Isabel Marant himself will continue to be a consultant. The identity remains in the brand.
Some analysts pointed out that if the transaction can be reached, Isabel Marant will have a synergistic effect with brands with similar positioning such as Michael Kors, and Capri Group is expected to surpass Coach parent company Tapestry to become the largest luxury goods giant in the United States. The competition between the two kicked off as early as 2016, and they have been chasing each other closely.
If Isabel Marant can be won, Capri Group is expected to become the largest luxury goods giant in the United States.
John Idol, CEO and chairman of Capri Group, revealed at the Morgan Stanley Global Consumer and Retail Conference held on November 30 last year, The acquisition of new luxury brands has become the group's current priority, and will focus on European luxury brands with annual sales of more than 1 billion US dollars. "Businesses with only hundreds of millions of dollars are not worth our energy and time to operate."
Thomas Edwards, chief financial officer and chief operating officer of Capri Group, also said in May last year that the group is considering the introduction of new brands to enrich its brand matrix and stimulate performance to achieve greater breakthroughs and value-added. According to the latest forecast of the Swiss financial newspaper "L'AGEFI Quotidien", Isabel Marant's sales exceeded 200 million euros last year, and EBITDA was around 50 million to 60 million euros.
At present, the race between Capri Group and Tapestry is at a critical point. In the third fiscal quarter ended December 25 last year, Capri Group's sales rose 24% to US$1.61 billion, which has returned to its pre-epidemic level, and its net profit soared nearly 80% to US$322 million, surpassing Tapestry Group. Net profit for the same period rose only 2.25% to $318 million.
Amid this positive dynamic, Capri Group has raised its full-year outlook, forecasting revenue of $5.56 billion for fiscal 2022, up from an earlier forecast of $5.4 billion.
However, with many lessons learned, acquiring new brands to stimulate performance growth is not a long-term solution. In the face of increasingly changeable consumers and an uncertain retail environment, the key to Capri Group's success is still to focus on products. To expand the business, the top priority is to strengthen the profitability.
For the acquisition news, JPMorgan Chase and Montefiore declined to respond, while Capri Group and Isabel Marant did not comment. As of Wednesday's close, Capri Group's shares fell 2.6 percent to $48, with a market value of about $7 billion.