Jacquemus hires Rothschild & Co to find a minority investor
Jacquemus has retained Rothschild & Co to help it find a minority investor willing to finance its ambitious store opening plans and expensive celebrity-peppered shows and events, several senior industry sources with first-hand knowledge of the matter said.
Until last year, Jacquemus was regarded as one of France’s most prominent success stories. It’s been hit by the luxury spending downturn, particularly online, where it makes a significant proportion of its sales. Turnover this year is expected to be down 15-20 percent, industry insiders say.
On Friday, the brand opened its first flagship outside Paris, in New York’s Soho right opposite Chanel. On social media, it posted videos of crowds applauding founder and designer Simon Porte Jacquemus, who simply goes by “Simon,” cutting the ribbon with big scissors. It showed people queuing from around the block to get into the new boutique. It also shared videos and photos of people eating oversized pizza, carrying a giant bagel or coffee cup or miniature cardboard Empire State Building.
Next month, Jacquemus is due to open a boutique on London’s chic Bond Street right opposite Gucci. And in February, it’s aiming to open a store in Los Angeles. These projects represent significant investments.
The drop in revenue has put pressure on available cash, industry sources say. In the past few weeks, the fashion rumor mill had it that Simon was being considered for the vacant seat of creative director at Chanel – one of the most coveted jobs in the industry. But several industry sources believe that Simon himself may have triggered the rumor to look more desirable for potential investors. His style does not really fit with Chanel’s image and heritage, experts say.
Jacquemus, which was feted last year as a fashion “unicorn” when the business was valued at €1 billion, has seen its profitability decline due to the drop in online sales on its own website and on the sites of struggling retailers such as YNAP, Farfetch, MatchesFashion and Canada’s Ssense. Last year, the brand said it made nearly 50 percent of its turnover online. Jacquemus’ turnover was reported to have reached a peak of €280 million in 2023.
In the past few years, industry insiders have said they thought LVMH was interested in investing in Jacquemus. However, the French group may not be willing to buy a minority stake, only a controlling stake, and it would want a deal whereby the designer agrees to work as well for one of its brands. Gucci owner Kering may also express interest, as well as some private equity firms.
GOVERNANCE
Jacquemus may be an attractive brand, but it has serious corporate governance issues. The company lost its CEO in December and never replaced him. The CEO now is Simon, who is a talented designer and social media genius but not a businessman.
Jacquemus has grown very fast and has not had time to adapt its corporate structure to its size, sources close to the brand say. The brand now employs around 300 people, more than twice as many as it did three years ago. Revenue rose from around €20 million seven years ago to €50 million in 2019 and reached more than €200 million in 2022. At its show in June 2023 at the Grand Canal of the Château de Versailles, Bastien Daguzan, who was then CEO, told Miss Tweed that the brand was aiming for sales of €500 million by 2025.
Daguzan, who became CEO in 2022 after working for the brand for many years, left abruptly at the end of last year. On Dec. 6, two weeks before his exit, he had been elevated to the position of chairman in addition to his CEO role, and said his promotion reflected the trust he had built with Simon. Few people in the industry understood that move.
Quickly, the two men fell out over who was running the company and Daguzan was asked to leave.
Daguzan had tried to install operational processes and put in place an executive committee to clarify the corporate structure and lines of command. The company this week declined to give details on its organizational structure – which cannot be a good sign. If there was one, surely it would make no secret of it.
Daguzan had also tried to get more experienced managers to run the company to replace a tight-knit team of Simon’s close friends who have been with him from the start but lack professional managerial experience. Daguzan’s attempts to introduce professional managers created tension, even animosity, with the core group surrounding Simon.
Last year, Daguzan hired Vittoria Pietropoli from LVMH’s Loro Piana to become Jacquemus’ new brand and communications director. Previously, Pietropoli had worked for Moncler and the PR firm Karla Otto. Her nomination was part of Daguzan’s efforts to strengthen leadership and reduce the brand’s reliance on consultants and service providers. To this day, Jacquemus still uses a lot of external service providers in many areas, from shows and events to product prototyping. Industry sources say the brand remains relatively disorganized internally.
Last month, Daguzan took the executive reins of the Los Angeles brand Fear of God.
Daguzan’s sudden departure raised questions about the future of Jacquemus. The relationship between the creative and the executive sides is fundamental to success. It can make or break a fashion brand. From the outside, Daguzan and Simon Jacquemus appeared to be very complementary.
Daguzan knew how to organize a business and handle creatives. Simon captures the desires of a young generation and knows how to speak to his audience while being extremely creative and positive in his messages at all times. He has a knack for public relations and his voice comes across as authentic. He has put his personal life on show via social media, which makes him appear accessible. The brand constantly posts videos and photos on Instagram and Facebook, and this creates engagement.
Handbags are what drive Jacquemus’s sales and margins. One of Jacquemus’s bestsellers is the trapezoid-shaped Chiquito bag, which starts at €550 for the smallest version – big enough for an iPhone and a lipstick – and can fetch up to €920 in larger versions.
This status symbol handbag has been positioned at a relatively accessible price range compared to the thousands of euros fashionistas have to dish out for a small Gucci, Saint Laurent or a Chanel handbag. Some consumers on social media have criticized the bags as being expensive for what they offer in terms of size and functionality. For example, they complained that the Chiquito did not sit well on the shoulder and kept turning on itself upside down, as its handles were too heavy relative to the body of the bag.
Jacquemus’s biggest markets are France, the United States and the United Kingdom. Rothschild and Jacquemus declined to comment for this report.