October 28, 2015 / 4:53 PM / 2 years ago

Elbaz leaves fashion label Lanvin, Wang rejected offers

A model presents a creation by Israeli-American designer Alber Elbaz for Lanvin.Benoit Tessier

PARIS (Reuters) - Alber Elbaz is leaving Lanvin after 14 years at the creative helm of France's oldest fashion brand.

Lanvin gave no explanation but industry and financial sources said tensions had been growing between shareholders because the company's sales and profits had been in constant decline over the past three years.

Partly stoking the tensions was the fact that Lanvin's controlling shareholder, Taiwanese media magnate Shaw-Lan Wang, had rejected several offers for the company a few months ago, the sources said.

Wang rejected an informal offer worth more than 400 million euros from Valentino's Qatari owners Mayhoola and another indicative bid of less than 400 million euros from Gucci owner Kering, sources close to the matter said on Wednesday.

"It is a shame Ms Wang rejected that offer, as Lanvin without Alber now, is certainly not going to be worth that much today," one of the sources said on Wednesday.

Lanvin's minority shareholders include German investor Ralph Bartel, who owns 25 percent, and Elbaz who has a stake of nearly 18 percent. Elbaz is widely credited with having infused new life in Lanvin and has been the brand's main driving force.

"It is clear that Elbaz and Bartel were not happy to see the sales and the value of their investments go down... But I think Ms Wang simply did not want to sell," another source said.

It is not clear what Elbaz will do with his stake since he bought part of it thanks to a loan from Wang, the sources said.

They said the designer was earning more than 5 million euros a year.

Founded in 1889, Lanvin is known for its silk cocktail dresses adorned with chunky jewellery and it is one of the last remaining independent major luxury fashion brands in France together with Hermes.

The sources said Bartel and Elbaz felt Wang was not investing enough in the business, in areas such as merchandising and boutiques, and did not see eye to eye with her on strategy.

Many industry specialists say Lanvin has the potential to be one of the industry's biggest fashion brands and could replicate the phenomenal success of Valentino.

Several sources estimated Lanvin would need at least 100 million euros of investment to take its development to the next level.

Over the years, Wang has sold off many of Lanvin's assets including its Japanese operations as well as its perfume business to perfume maker Interparfums.

Wang and Mayhoola were not immediately available for comment while Kering declined to comment.

Lanvin's operating profit in 2014 fell to 3.3 million euros from 13.9 million euros in 2012 on revenue of 206 million euros, down from 235.1 million euros in 2012, according to the company's official filing with France's companies' registry.

Thierry Andretta abruptly resigned as Lanvin's boss two years ago due to strategic disagreements with Wang who took over the executive management of the company.

Andretta is now chief executive of British fashion brand Mulberry.

Elbaz's resignation comes a few days after Raf Simons left Dior after a three-and-a-half year tenure to pursue other interests. [ID:nL8N12M5QN] Some media suggested Elbaz could join Dior.

Simons' departure sparked media comments about how fast-fashion brands such as Inditex's Zara have been putting pressure on big fashion brands such as Dior and Chanel to produce more collections every year, creating ever more work for designers.

Addtional reporting by Pascale Denis, editing by James Regan, David Evans and Adrian Croft

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