Big luxury brands are aligning themselves with up-and-coming designers, nurturing young talent while also receiving an injection of fresh creativity and vision.

The luxury industry is a hungry beast. To feed the growing appetite for creative talent, the big luxury conglomerates have increasingly been on the look out for niche, boutique houses to add to their portfolios. Over the past couple of years, they’ve been snapping up designers who are barely out of college, creating a buzz in the industry about which talented ingénue might be next to join their list.

Brands such as Gucci, Saint Laurent and Christian Dior continue to be hugely sought after, but luxury consumers are constantly looking for something new—as the luxury marketers know.

Jonathan Anderson, the 29-year-old designer of luxury label JW Anderson, which was recently purchased by LVMH

 It is something of an obsession for the sector’s influential “early adopters” and opinion formers to identify the Next Big Thing and, even more importantly, the Next Big Name.

JW Anderson SS14

Kering, for instance, has acquired an interest in a luxuryclothing brand called Altuzarra, which was only founded in 2008. This follows its snapping up of the much-applauded designer Christopher Kane.

LVMH has just purchased upmarket British shoemaker Nicholas Kirkwood, as well as taking a minority stake in a 29-year-old couturier called Maxime Simoëns. 

JW Anderson SS14

In September, LVMHalso bought a stake in the fashion label JW Anderson. The man himself, Jonathan Anderson, 29, only left the London College of Fashion eight years ago, but already his striking transgender look has prompted Donatella Versace to compare him to her late brother, Gianni.

Anderson said of the deal, which has also made him creative director of LVMH’s 157-year-old Spanish leather brand Loewe, “LVMH has the resources and expertise in sharp, modern luxury and I believe we can work together to create something new.”

British designer Christopher Kane, whose brand was once only known by editors and fashion devotees, was strategically acquired by LVMH in September 2013

In reply, Pierre-Yves Roussel, chairman and CEO of LVMH Fashion Group, said: “When Delphine Arnault [a senior executive and daughter of LVMH CEO Bernard Arnault] and I first met Jonathan, we immediately felt that we could help him express the full potential of his innovative, fast-emerging and already influential brand.”

Christopher Kane AW13

 The quid quo pro is pretty clear. LVMH needs new ideas—and personalities. Anderson, who was born in Northern Ireland and has a small studio in Dalston, a rough but increasingly bohemian part of east London, brings with him creativity but also a certain urban edginess. Luxury might traditionally be seen as refined and sleek but in light of the tough economic times, it’s also looking for an element of raw street cred.

“We believe that these acquisitions allow companies to secure in-house, high-potential designers who in the future, in addition to their line, can become creative directors of a major brand of the group’s portfolio,” says Mario Ortelli, a luxury expert and senior analyst at Bernstein Research. “[They can also] improve the group image as patron or sponsor of young talent and act as venture capitalists in something that could become the next big brand. We believe that luxury groups will continue to buy stakes in young and up-and-coming designers. The possible returns are high versus the relatively small investment a luxury group has to make to acquire a stake in a designer with big potential.

According to Bernstein Research, other niche labels featuring on the big groups’ radars include a young Italian designer, Francesco Scognamiglio, known for his very feminine look and floating fabrics, London-based Antonio Berardi whose sleek, tailored silhouette has won him a growing army of fans, and a 28-year-old New Yorker called Rosie Assoulin whose style is elegant but contemporary.

Nicholas Kirkwood has long been a British boutique favourite, but with the recent acquisition by a leading luxury conglomerate, the shoe label is sure to garner a new flock of upmarket followers

Luxury groups are cash-rich at the moment. Even with the world economy struggling to recover, the sector is enjoying its fourth year of growth and, according to Bain & Company, revenues are forecast to grow 50 per cent faster than global GDP, averaging six per cent growth a year, to reach €250bn in sales by around 2015. Gross margins can be as high as 66 per cent and growing consumer confidence in the US will result in six per cent sales increases. This robust growth and growing demand simply underlines the need for more creative talent.

 At least two of the big groups are pursuing a joint strategy. On the one hand they are buying stakes in well-established, easily recognisable brands, such as jewellery house Pomellato by Kering and LVMH’s acquisition of Bulgari and attempt at Hermès; on the other hand they are simultaneously snapping up young, niche companies such as Nicholas Kirkwood’s, whose shoes start at around £500 and are sold from his Mayfair boutique and stores around the world.

Kirkwood, 33, trained at Cordwainers—the shoe college—before he founded his company. The deal with Kirkwood helps position LVMH as a supporter of young craftspeople and emerging talent; in addition, it complements its own existing men’s shoe range under the long-established Berlutti name.

The deal mirrors the acquisition at the start of 2013 of 51 per cent of Christopher Kane by Kering, formerly PPR. With revenues of nearly €10bn, Kering owns Gucci, Bottega Veneta and Saint Laurent, among others. By contrast, Kane’s first independent show only took place in 2007, after he had garnered praise for his  award-winning collection at Central Saint Martins the previous year. In May 2009, he unveiled a line of T-shirts featuring a monkey print that soon became a must-have among fashion editors. He launched his first resort collection in November 2010 along with his first menswear collection in the same year, a hectic schedule by any standards.

Six months after the deal, Kering announced that Alexandre de Brettes, who has more than 10 years’ experience within the group, would become chief executive of Christopher Kane. “Alexandre’s appointment puts the running of our business in very good hands and gives us a strong ally in the building of our company. Together, we will focus on organic global growth and protecting and nurturing the creative DNA of our business,” Kane said.

 By the end of 2014 there will also be a Christopher Kane boutique on Mount Street in Mayfair, an area that is fast emerging as the smartest shopping street in London. Clearly, management expertise, investment and access to new manufacturing and distribution channels are among the key advantages for the young talent being brought up.

In tough times luxury is looking for an element of raw street cred

But how do they maintain their artistic integrity and creative freedom while becoming part of a large corporation? Suddenly there are departments such as HR, marketing and finance and purchase to deal with as well as shareholders to consider. Following the September 2013 acquisition by Kering of his eponymous brand, French-American designer Joseph Altuzarra issued a statement that made clear his motivation for agreeing to the deal—on his own terms.

Joseph Altuzarra’s label was purchased by Kering, but the young designer is determined to retain creative control over his designs

“This partnership will allow us to take the Altuzarra brand to the next stage of its development in accordance with my creative vision,” he announced. “The company will remain independent and controlled by Joseph Altuzarra and his family,” Alexis Babeau, managing director of the Kering luxury division, told trade magazine WWD at the time. “While not formally integrated in Kering’s luxury division, Altuzarra will have access to Kering’s breadth of experience and expertise when relevant.”

Expertise and investment are key advantages for bought-up talent

When LVMH acquired Parisian designer Maxime Simoëns for an undisclosed sum in February 2013, the idea was that the management of his new stable mate Christian Dior would coach the designer, who is not yet 30, and who only created his own brand with its contemporary graphic style in 2009. But, said Simoëns in a statement: “This partnership endorsement will allow the house to develop my creative vision internationally.” The reference here to “my creative vision” and not “our creative vision” is worth noting.

Joseph Altuzarra

 James LaForce of New York-based consultancy LaForce + Stevens, who has been involved in such deals, says: “The acquiring partner wants the designers to maintain their unique vision. That is the value they seek. Usually I hear from the business owners that the upside beats the downside. The acquiring company provides expertise and experience that the business owner would never have been able to access.”

But it’s not just Western designers who are being snapped up. In Asia, where revenue is forecast to grow a remarkable 20 per cent, according to Bain & Company, Qeelin was acquired in 2012 by LVMH. Inspired from a millennium-long Chinese cultural history, Qeelin turns mythical and superstitious symbols into contemporary jewellery. The house itself is only 10 years old. François-Henri Pinault, chairman and CEO of Kering, said of the deal: “We thus have great ambitions for the brand and will make it benefit from our expertise and know-how, so that it can speed up its development.”

The key to success is to give the small brands creative freedom

Having worked under greats such as John Galliano and Nicolas Ghesquière, all eyes are on designer, Maxime Simoëns, who already shows his designs during Paris Fashion Week


The key to success here, as in the West, is to give the small brands creative freedom, says Nicola Ko, senior luxury analyst at Ledbury Research and an expert in the Asian luxury market. Kering has signalled that it is looking for other opportunities, she adds. However, Asia presents additional obstacles for both sides in these deals.


“Their challenge is to change the perception of Asian brands to Asians themselves,” Ko explains. “For example, the Chinese tend to have a strong preference for foreign brands—they regard them as better in every aspect, from quality, to the status they convey. So many don’t yet understand the concept of paying a high price for something that is locally made.” This perception is changing, though, she says, and this is good news for young Asian designers, seeking to emulate their western counterparts who have been snapped up by the major players in the luxury sector.