Less than a month after the negotiations between the two parties became public, the Rykiel family and Hong Kong- based Fung Brands have sealed an agreement for the latter to acquire the 80% of the French ready-to-wear coveted brand.
Rykiel has been looking for an investment partner for some time and discussions have taken place with a number of potential candidates over the past few months. However, it has been Fung Brands - subsidiary of Fung Capital, the private investment arm of the Fung family – the preferred investor.
Sonia Rykiel has struggled lately financially speaking, as saw its turnover stagnate at EUR90m (US$118m) over the past two years. In comparison, Sonia Rykiel posted sales of 90 million euros ($117 million) in 2010. Consequently, the French quirky label said in July last year it had hired financial advisers to potentially open up its capital and raise funds for international expansion.
On his side, Fung Brands' chief Jean-Marc Loubier estimates the brand's turnover could be doubled over the next five or six years as a result of international expansion. It is worthy of note to stress that export markets currently account for about 50% of Sonia Rykiel's sales, the principal outlet being Europe. It also has a relatively small presence in the US and Asia.
Under the takeover proposals, Loubier, former CEO of Céline and Escada, will head Sonia Rykiel, which was founded by the eponymous designer around 40 years ago. The Rykiel family will retain 20% of the label and the founder's daughter, Nathalie Rykiel, will continue to hold the post of vice-president and oversee its artistic direction.
Set up a year ago by the Fung family, which controls sourcing giant Li & Fung, Fung Brands’ core aim are to acquire luxury brands. It has already purchased France's Robert Clergerie (shoes) and Belgium's Delvaux (leather goods). This will be Fung Brands‘first ready-to-wear acquisition since it was formed.