Gucci Group Acquires Balenciaga

Gcci Group N.V., Euronext, Amsterdam, has acquired Balenciaga S.A., owner of the Balenciaga luxury brand. Nicolas Ghesquiere will continue as creative director of Balenciaga, with broad responsibilities for all aspects of the brand’s creative direction and image. Last month, Mr. Ghesquiere won the coveted “international designer of the year” award from the Council of Fashion Designers of America following several seasons of highly acclaimed collections shown in Paris.

In 2000, Balenciaga had revenues of about $20 million, approximately two-thirds of which came from fragrances and the balance from ready-to-wear and accessories, including from licensed businesses. Under the terms of the acquisition, Balenciaga will retain creative control and direction over all aspects of the brand. A manufacturing and distribution agreement for the Balenciaga fragrances has been entered into with Groupe Jacques Bogart for respective periods of up to three and four years under YSL Beaute control. A new fragrance line, which is expected to be launched in 2004, will be developed under license by YSL Beaute, Gucci Group’s fragrances and cosmetics division.

The House of Balenciaga was founded in Spain in the 1920s. In 1937, Cristobal Balenciaga opened in Paris at 10 Avenue George V, where the flagship store still operates today. Balenciaga flourished as one of the great icons of the Paris fashion world and internationally under the guidance of Cristobal Balenciaga. He closed his haute couture business in 1968. The label subsequently continued primarily as a licensed fragrance operation until 1986 when it was acquired by the French fragrances and fashion group, Groupe Jacques Bogart.

Working with Mr. Ghesquiere, Gucci Group plans to accelerate the development of Balenciaga as a global luxury brand, building on its exceptional fashion heritage and focusing primarily on women’s ready-to-wear, accessories and fragrances. Over the next few years, the company plans to open flagship stores in the world’s fashion capitals as part of a plan to broaden its market reach.

Gucci Group will own 91% of the share capital, with Mr. Ghesquiere holding the balance. Balenciaga will operate as an independent company under the Gucci Group umbrella. Pascal Perrier, currently executive vice president and director of licensing at Yves Saint Laurent, will be appointed chief executive officer of the business, effective September 1.