Berluti eyes designer Haider Ackermann

LVMH's loss-making luxury shoe-maker Berluti has been trying to re-invent itself as an upmarket ready-to-wear brand.
LVMH's loss-making luxury shoe-maker Berluti has been trying to re-invent itself as an upmarket ready-to-wear brand. PHOTO: AGENCE FRANCE-PRESSE

PARIS • Berluti, LVMH's loss-making luxury shoe-maker, is in talks to hire Paris-based designer Haider Ackermann to replace Alessandro Sartori, who returned to previous employer Ermenegildo Zegna in February, two sources close to the matter said.

Ackermann, a respected figure in the fashion industry known for his super-imposed layers, draping and dark style, will be expected to give Berluti a sharper, more modern fashion edge. "The talks are ongoing, therefore the timing of an announcement is not clear yet," one of the sources said.

Ackermann created his eponymous brand in 2003, which is distributed only through wholesalers and online retailers.

LVMH declined to comment, as did a spokesman for Ackermann.

Created in 1895 and specialising in €1,500 (S$2,254) luxury shoes with a peculiar two-tone shine and finish, Berluti has been trying to re-invent itself as an upmarket ready-to-wear brand.

Analysts estimate it has burnt €100 million to €150 million since LVMH stepped up investments five years ago and LVMH boss and controlling shareholder Bernard Arnault placed his son Antoine at its helm.

Back in 2011, LVMH had grand ambitions for Berluti. It aimed to use it as a platform to gain more exposure to what was then a vigorous luxury menswear market, driven by strong Chinese demand.

In the past two years, however, the luxury sector has slowed sharply and Chinese men's appetite for luxury shoes and clothes has become much more subdued.

Berluti opened flagship stores in every major city and invested in its website. Today, it has more than 50 standalone stores and is estimated to incur around €50 million of losses on a turnover of about €150 million.

Back in 2013, Mr Bernard Arnault said he expected Berluti to become profitable this year.

Berluti is regarded by the financial community as one of LVMH's problem children, together with Marc Jacobs, but for different reasons. Last year, LVMH announced it would discontinue the Marc by Marc Jacobs line, which was more affordable than the Marc Jacobs line, and the restructuring dug holes in the company's accounts.

LVMH said this week it did not plan to sell the loss-making Marc Jacobs company after agreeing to sell Donna Karan International, the parent of New York label DKNY, to US clothing firm G-III Apparel Group for US$650 million (S$871 million).

LVMH said Berluti's losses had narrowed in the first half, but it did not say when it expected it to become profitable.

REUTERS

A version of this article appeared in the print edition of The Straits Times on August 04, 2016, with the headline 'Berluti eyes designer Haider Ackermann'. Print Edition | Subscribe