Stella McCartney Ends 17-Year Partnership With Parent Company Kering
After much speculation over Stella McCartney’s future with French parent company Kering, both parties finally released a joint statement today confirming that Kering will sell its 50% stake in Stella McCartney Ltd to McCartney herself, a move that now gives her complete ownership of her namesake brand.
Francois Henri-Pinault, Chairman and CEO of Kering, expressed that this is the right time for McCartney to take her company to the next stage. “I am extremely proud of what Kering and Stella McCartney have accomplished together since 2001. I would like to thank Stella and her team wholeheartedly for everything they have brought to Kering — far beyond business,” he said. “Stella knows she can always count on my friendship and support.”
McCartney, for her part, expressed her gratitude toward Francois and the Kering group for all they have built together for the last 17 years. “It is the right moment to acquire the full control of the company bearing my name. This opportunity represents a crucial patrimonial decision for me,” she notes. “I look forward to the next chapter of my life and what this brand and our team can achieve in the future.”
Kering will cooperate with McCartney to ensure the brand a smooth transition process. According to a report, London-based retail strategy consulting firm Javelin has been tasked with helping to reorganize and create a blueprint for McCartney’s newly independent business. McCartney will continue to be part of the Kering Foundation board and will continue to collaborate together in the field of sustainable fashion.
The exact reasons for the split were not explicitly stated. The move comes after Kering recently announced that it would spin off German sportswear brand Puma in an effort to concentrate on its stable of pure luxury brands. While Kering doesn’t break out revenues for each of its individual brands, Stella McCartney’s business lags in comparison to Gucci and Yves Saint Laurent, and Balenciaga has been growing at an exponential rate.
McCartney and Kering first entered into a joint 50/50 partnership in 2001, back when Kering was known as Gucci Group and run by chief executive Domenico De Sole and Tom Ford. Since then, the two parties have helped create a global brand (also forging license partnerships) that includes categories of women’s ready-to-wear, handbags and accessories, lingerie, athletic gear, children’s wear, fragrance, and recently menswear. In contrast to the rest of Kering’s brands, McCartney’s business model has always maintained its commitment to producing products without furs, leathers and any other animal skins. Her commitment to developing a sustainable, ethical business, however, did translate to Kering’s business as a whole, and Kering now delivers an annual environmental profit and loss account to measure the impact of the business and supply chain on the environment.
In an interview with Women’s Wear Daily, McCartney did not explain how the company plans to finance the buyback. As for the foreseeable future, she said there were no plans for an IPO or to take on a new business partner. However, several market sources have mulled that she has been in talks with a few interested parties. She also said that moving forward she will continue to implement an environmental P&L statement.
Kering, which also owns Bottega Veneta and Alexander McQueen, is coming off an excellent year of record growth. The company posted sales of €15.5 billion in 2017, a 25% jump from the year prior. Stella McCartney’s business was not singled out as one driving growth for the company, unlike their core brands Gucci, YSL and Balenciaga.