Analysis Of The Risk Of Acquiring The Old Luxury Brands In Europe

P, Richemont, is still struggling to sell its French luxury leather brand Lancel. At present, the purchase intention is: private equity fund Change Capital and Lion Capital. Hongkong's Swire Group also has a joint auction with other private equity funds. Besides, the Impala group of French entrepreneur Jacques Veyrat (Louis Dreyfus Corporation former CEO) focuses on investing in troubled enterprises and is also a possible candidate.

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P > the industry generally believes that although Lancel has a glorious 137 year history, it has fallen into a declining trend, with sales of 135 million euros and operating losses of about 10 million euros last year.

If we want to reverse the situation completely, it will take 6~8 years to estimate, which will mean a great risk to the acquirer.

(the duration of private equity investment is usually 3~5 years) < /p >

In order to dispel investor concerns, it is said that P has said it will compensate the buyer for a loss of up to 20 million euros for two years.

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< p > Lancel is currently managed by CEO Fabrizio Cardinali, Dunhill's company under the name of Li Feng. The new creative director, Nicole Stulman, came from the US brand Reed Krakoff and worked for Hermes and Celine. However, the position of the director of commodity planning has been vacant for a long time, and there are not few key posts either from lack or from illness.

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< p > Lancel, founded in 1876 by Ang Le Lancel, the designer of accessories, has been in the hands of the founder family until 1970s when it was bought by the Zorbibe brothers. Under the auspices of chief executive Sidney Toledano (currently Dior CEO), the success of the patent bucket bag was launched.

When it was acquired by the Swiss peak group in 1997, the gross margin of Lancel was even higher than that of Louis Vuitton.

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< p > but since then, Lancel has not invested enough in brand development. It has not been able to seize the opportunity of the global luxury market like a href= "//www.sjfzxm.com/news/index_c.asp" > Louis Vuitton < /a > so far, 80% of sales still come from the French mainland, and product design is too conservative. Recently, a large discount sale has damaged the positioning of luxury goods.

Moreover, the management of Lancel has been in turmoil. In the past 16 years, CEO has changed more than 10.

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< p > nowadays, Lancel needs to invest heavily in product design, marketing, store concept and brand image.

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< p > Lancel recently adopted the strategy similar to Louis Vuitton and Gucci to upgrade the product quality and launch the ostrich skin "L" package with a price of up to 4500 euros, which was questioned by the industry.

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< p > industry analysts believe that < a href= "//www.sjfzxm.com/news/index_c.asp" > Lancel < /a > should be close to light luxury, sell 200~800 euros of low price products, compete with Coach, Michael Kors and Longchamp, and launch clothing series to attract passenger flow.

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The revival of < p > European a href= //www.sjfzxm.com/news/index_c.asp > luxury brand < /a > is often a long and risky process, which requires huge investment in marketing and new stores.

Under the background of the global slowdown in the growth of luxury consumption, it will be more difficult.

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< p > the famous French designer brand Lanvin was bought by L'OREAL media girl Wang Xiaolan from Taiwan in 2001. It took more than 7 years to turn it around.

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< p > private equity fund TPG bought the famous Swiss luxury brand Bally, struggled for more than 9 years, and finally threw it to Labelux group in 2008.

For brands that are still in business but are in trouble, due to too many loads and brand image damage, it is particularly difficult to reverse the situation.

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P, Carven, Balenciaga and Lanvin, which have been successfully revived, have been silent for a long time before they are bought. The new owners can easily go into battle without any burden, but they are relatively easy to operate.

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