Narciso Rodriguez sold (50%) to Liz Clairbourne INC

[zamb]

From WWD.com

Liz Takes Stake in Narciso Rodriguez

By Marc Karimzadeh

NEW YORK ? Narciso Rodriguez has finally found himself a new partner, and it is none other than Liz Claiborne Inc.


Claiborne and Rodriguez will announce today that they have entered into
a partnership, with the $4.99 billion apparel giant buying a 50 percent
ownership in the designer's name and trademarks. They will create a new
company to build the Narciso Rodriguez brand globally, with the
designer serving as the creative director.


It was widely known in fashion circles that Rodriguez was looking for
investors to build his business worldwide, and this could be the deal
to help him realize his goals. It remained unclear at press time what
the deal means for Rodriguez's manufacturing arrangement with Aeffe
SpA, although it is possible that relationship could end. Rodriguez's
unhappiness with the Aeffe relationship has been one of fashion's worst
kept secrets, and Aeffe made no mention of the designer in its earnings
report last month.


"Narciso's strong following and high recognition level position his
business well for considerable organic growth," William L. McComb,
chief executive officer of Claiborne, said in a statement. "In addition
to the expansion of the existing collection business, we feel there are
abundant brand extension opportunities in nonapparel and licensing
categories, as well as increased international distribution. Further,
we see potential in the direct-to-consumer channel on a worldwide
basis."


Rodriguez said in the statement: "Collaborating with Liz Claiborne will
enable me to focus on my work and all of its possibilities. Bill McComb
and his team have a clear understanding of my vision and are committed
to help me realize my dream."


McComb and Rodriguez were unavailable for additional comment on Sunday.


After studying at the Parsons School of Design, the Cuban-American
designer started his career at Anne Klein, under Donna Karan, and later
worked at Calvin Klein, Cerruti and Loewe. He became a household name
after creating the bias-cut pearl silk crepe wedding gown for his
friend Carolyn Bessette Kennedy. He launched his own namesake business
in 1997. Rodriguez won the CFDA Womenswear Designer of the Year award
in 2002 and 2003. He is best known for clean lines and figure-hugging
dresses favored by Jessica Seinfeld, Sarah Jessica Parker, Salma Hayek
and Julia Louis-Dreyfus. He added men's wear in 2005. Rodriguez's
collections are sold at specialty stores such as Neiman Marcus, Saks
Fifth Avenue, Barneys New York and Bergdorf Goodman. He also has a
fragrance line in a licensing deal with Beauté Prestige International.


Despite the accolades, Rodriguez has always struggled to build critical
mass globally. The designer hired former Giorgio Armani executive
Roberto Pesaro as president and ceo of his company last year, but the
executive left in less than 10 months. The Narciso Rodriguez flagship
in Milan shut its doors around February amid recurring speculation of
the designer's strained relationship with Aeffe. ElixirAdvisors
represented the designer in the Claiborne deal.


This is the first major apparel deal for Claiborne under McComb.
Rodriguez is at a higher price tier than other Claiborne divisions,
which include Kate Spade, Juicy Couture, Ellen Tracy, Dana Buchman and
Sigrid Olsen.


"Unlike acquisitions of fully scaled businesses, here we are
affiliating with one of the world's finest designers to organically
build a broad business in a growing and profitable category that we do
not currently operate in ? the luxury designer segment ? that is sold
in productive and partnership-oriented upscale retailers," McComb said
in the statement. "The chance to work with Narciso to significantly
grow his business while retaining his unique vision of timeless
elegance was right in line with our commitment to outstanding designers
and design excellence. We were compelled to seize on this opportunity
now."

__________________

[Faust]

Re: Narciso Rodriguez sold (50%) to Liz Clairbourne INC

Thanks, Zam. We'll see how it turns out. I can already see Narciso by Narciso Rodriguez at Barneys Co-Op. Hopefully it will allow him to expand the capsule menswear collection, which is of excellent quality.

[Faust]

Re: Narciso Rodriguez sold (50%) to Liz Clairbourne INC



Wow, it looks like he was struggling.

The fashion designer Narciso Rodriguez finds a savior, with help from his friends

By Cathy Horyn

Monday, May 7, 2007

NEW YORK:
Few dresses have glamorized bare flesh more than the silk slip that
Carolyn Bessette wore to marry John F. Kennedy Jr. in 1996. It blotted
from the mind the school-girl roundness of Diana, it stoked the copy
kings - one manufacturer sold 80,000 copies - and it gave an unknown
designer, Narciso Rodriguez, a very nice push.

But in recent months, behind the media blaze of his shows and his
image as a successful designer, Rodriguez has been struggling. He had
trusted the wrong people, he said, listing lawyers and other advisers,
and that trust had put his business in a bind. He could continue to
plod along and hope for the best, or he could declare bankruptcy and
call it a day.

Instead, and against the view of the fashion world as a cold-hearted
place, he picked up the phone and asked for help. He called Donna
Karan, Ralph Lauren, and Anna Wintour, the editor in chief of U.S.
Vogue, and his close friends in the parallel world of celebrity, Jerry
and Jessica Seinfeld. And he told them all the same thing.

"He said, 'You're not going to believe this but I have no money,' " Karan recalled.

Today, Rodriguez's candor is being unexpectedly rewarded. Liz
Claiborne, the giant U.S. clothing manufacturer, is acquiring his
upscale label.

The $12 million transaction marks the first time in the U.S. fashion
industry that a mainstream clothing company is betting that it can buy
a niche luxury designer, with both coming out ahead.

How the deal got accomplished is a story about an industry that
operates well outside the norms of 21st-century capitalism. The fashion
industry is a gigantic $300 billion business made up of public
companies as well as independent fashion houses. But it also functions
as a neighborhood, where long relationships and time-tested handshakes
go a long way in determining how things get done. The news of the
purchase comes a week after Claiborne reported a 65 percent drop in
first-quarter earnings, sending its stock tumbling 17 percent.

The magnitude of the decline suggests that Claiborne, like other
companies whose main business is in department stores, has been too
slow to grasp that many consumers today prefer to shop in trendy stores
like H&M.

And the deal comes after six months of negotiations dotted with the
deep mistrust that defines the traditional divide between manufacturers
and designers.

Like any designer whose standards were high, and who sketched and
fitted all his own clothes, Rodriguez harbored fears about being eaten
up by a big manufacturer. More than once in February and March, when it
was not at all clear there would be a deal, he said, "This is not my
dream, to sell my company to Liz Claiborne."

As it turned out, Claiborne's board of directors had doubts about
him as well. It wanted to know why he had not been more successful.
While it was true that it generally takes a minimum of 10 years to get
a designer business going, by that standard, Rodriguez, 46, was way
behind peers like Marc Jacobs and Michael Kors.

In 1997, Rodriguez started his own business in Milan, later moving
it to New York. By 2003, when the U.S. fashion industry named him
Designer of the Year, for the second successive year, his clothes were
selling in high-end stores like Bergdorf Goodman and Neiman Marcus, and
they were generating annual sales of nearly $14 million.

To help finance his business, Rodriguez had turned to Massimo
Ferretti, an Italian manufacturer whose company owns Moschino and
Alberta Ferretti.

They formed a partnership in which Ferretti would produce and distribute Rodriguez's clothes, paying the designer royalties.

Problems were soon evident to both men. Under the terms of their
agreement, Rodriguez could not use other companies to make accessories,
yet Ferretti showed little interest in making them. (In an interview,
Ferretti said accessories accounted for "maybe 3 or 4 percent" of
Rodriguez's revenues.)

Rodriguez informed Ferretti in an e-mail message that it was time to
consider ending their partnership. He said he would declare bankruptcy
if necessary.

He realized that the only people whose advice he could trust were
those he knew in the industry, his friends. And now he called them
without shame. He called Wintour. Known for her quick efficiency and
deal-making, Wintour said in an interview later that she sensed "his
problems were very serious," and she suggested one or two people he
might speak to, including an executive at Claiborne.

"Liz just seemed to me right," Wintour said. "They had just hired a
new CEO." As it turned out, Rodriguez had recently had a conversation
with Anne Cashill, vice president for business development at Claiborne.

Karan put him in touch with Gail Zauder, an investment banker, to
see if she could straighten out his finances. A veteran of Wall Street
with a no-nonsense manner, Zauder had represented Karan in the $400
million sale of her company, in 2001, to LVMH Moet Hennessy Louis
Vuitton. She had also been involved in deals with Claiborne.

After meeting with Rodriguez and reviewing various documents, she
agreed not only to help him find a deal but also to work without a fee.

Claiborne has been eager to catch the wind for more exciting fashion, buying Lucky Jeans and Juicy Couture.

That's what led Bill McComb, the company's new chief executive, to
call Rodriguez in December and arrange to meet him in his studio,
bringing a brown bag lunch of organic salmon and brown rice.

[Faust]

Well, that did not last long...

Narciso Rodriguez and Claiborne in Talks to Possibly Part Ways

NEW YORK — Liz Claiborne Inc. and Narciso Rodriquez, stalemated by fundamental differences over how to grow the designer’s niche business, are in talks to possibly sever the $4 billion vendor’s stake in the brand, according to sources. Various options are being considered, and nothing has been finalized.

Rodriguez has a right, according to the contract the two firms signed in May 2007, to buy back his stake, but sources said the notoriously difficult designer is having trouble finding an investor. Other possible endings could include Claiborne maintaining a silent partnership, an active partnership or keeping a financial interest without funding...

[airboyair]

why did I see that coming?

[Faust]

why did I see that coming?

because history repeats itself? waiting for a picture of narciso holding his cock.

[airboyair]

i actually met him at A last month, and i almost saw it.
he probably bought stuff to copy.

[Faust]

In a joint statement Liz Claiborne Inc. and Narciso Rodriguez announced that they have agreed to terminate their business relationship initiated in May 2007. As a result of this agreement, Narciso Rodriguez will regain full ownership of the trademarks and business bearing his name. The financial details have not been disclosed. "Initially we both saw significant opportunities to develop the collection in multiple product categories, channels and geographies, but differences emerged as to how best to achieve this organic growth, and we have decided to terminate our business relationship by mutual agreement," said William McComb, Liz Claiborne's chief executive, in a statement.

In May of 2007, Liz acquired a 50 percent ownership interest in the Narciso Rodriguez name and trademarks, and said it would form a new company to develop the brand.

The partnership marked Liz's entry into the luxury designer segment, and Liz, whose brands include Juicy Couture and Kate Spade, was hoping to license the Narciso Rodriguez brand and extend it into accessories. Mr. Rodriguez said: "I am pleased that Liz Claiborne Inc. and I have found a mutually beneficial agreement. Ownership of my trademark and the company will give me the ability to explore a multitude of new opportunities and realize our full potential as a luxury brand."

Termination of Liz Claibornes involvement meens that Rodriguez for the first time has complete independence over the label he founded in 1997 in partnership with Aeffe SpA. The focus for the label will now be on finding a president and exploring various licensing opportunities.