After more than six decades in fashion, designer Pierre Cardin is ready to sell its overstretched brand, once a luxury fashion landmark, today more of a licensed brand which includes carpets, shirts, suits, lighters, pens, etc.
The timing could not be worse, not only given the international recession but also what seems a total loss of control over the hundreds of Pierre Cardin licensed products worldwide. At 88 years old, Mr. Cardin says he wants to sell his business to ensure it outlives him. "I want to sell it now," Mr. Cardin said in an interview in his corner office overlooking the French presidential palace. "I know I won’t be here in a few years and the business needs to continue."
The price Mr. Cardin wants, €1 billion seems short of a dream, given that a buyer would hardly know or understand what he is actually buying.
Mr. Cardin doesn’t have a clear idea about his company’s annual sales, which are garnered by some 400 license partners world-wide. "I don’t know how much it makes," says the fast-talking couturier, who has no heir. "It’s incalculable."
A few years ago, Mr. Cardin said he wanted to sell his business for €500 million, but no one came forward. The designer says he’s serious about selling this time.
But Cardin’s main fashion line is a shadow of what it once was. He has only one boutique, on the ground floor of his Paris headquarters. It doesn’t see much customer traffic. He organized a runway show during Paris fashion week last fall for the first time in a decade, but it was a rambling collection that didn’t draw any top editors or buyers.
"He’s the extreme of fashion licensing," says Valerie Steele, director of the Museum at the Fashion Institute of Technology in New York. "Though it’s been wildly successful for him financially, it has diluted his image."
In recent years, sales and profits at several of Mr. Cardin’s subsidiaries have continued to slowly increase, according to the company’s public records. Still, there is no global picture of his finances. Making his financial empire more nebulous, he claims to owns a 5% to 10% stake in each of the companies he licenses his brand to, as part of the royalties he collects.
"Look, here’s an €8-million contract for some products for Iran and Iraq," he says, shuffling through a thick stack of papers on his desk. Mr. Cardin says he has always taken care of his own finances. "I don’t have a board, I am my own board," he boasts.
Asked how he came up with the billion-euro valuation, he takes out an old greeting card and, scribbling, says, "If I ask €10 million per product, which is nothing at all, per country, multiplied by 1,000, that makes one, two, three…." Dismissing the profusion of zeroes, he concludes, "One thousand products, 100 countries, that’s how it calculates. It’s nothing."
Mr. Cardin also owns swathes of expensive real estate in central Paris and the south of France, assets that bankers say could make up a chunk of the value of the company. Three of the properties are former shops—money pits, in Mr. Cardin’s opinion—that he keeps vacant. "It’s more profitable to have them closed than open," he quips. "I want to remain as creative director," he says. "It would be in their interest for the brand’s image."
adapted from The Wall Street Journal
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