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Chou and Stroll, through their company, Sportswear Holdings Limited, concluded separate deals to acquire what sources placed at 85 percent of the company. That includes the one-third stake in Kors’ business held by LVMH Moët Hennessy Louis Vuitton, the 10 percent that Onward Kashiyama USA bought in 2000 and the remainder owned by John Orchulli, the designer’s long-term business partner who will remain with the firm as chief executive officer for a short-term interim.
The complex deal, struck late Tuesday night, comes less than a week since LVMH chief financial officer Patrick Houel said that the conglomerate would continue to shed some of its businesses, specifically citing cases where LVMH owns shares in companies, following its divestitures of upstart beauty companies Hard Candy and Urban Decay and a 27.5 percent stake in Phillips, de Pury & Luxemborg, the auction house. Kors, who has had a relationship with LVMH as the designer of its Celine collection since 1997, sold the one-third stake to LVMH in 1999.
The sudden arrival of Chou and Stroll, who already own the British luxury brands Asprey & Garrard and recently made an unsuccessful run for Calvin Klein Inc., struck some analysts and retailers as indicative of a strain in the relationship between the designer and the French conglomerate, rumors of which have occasionally surfaced. But Kors, Chou and Stroll said in a joint interview on Wednesday that was not the case. Kors said that he coincidentally had extended his contract to act as creative director for Celine for another year, through March 2004. (A detail not lost on the participants was that the interview was held in the Christian Dior suite of the St. Regis, 18 stories above the Louis Vuitton flagship on Fifth Avenue.)
While terms of the deal were not released, Wall Street sources said Stroll and Chau paid a total amount roughly equivalent of the global volume of all Kors products, or slightly less than $100 million. Some analysts said some of Kors’ partners were interested in such a deal as a reaction to the intense pressure facing all the luxury conglomerates over the past few years.