Vandevelde fund buys Jil Sander label

Prada, the Italian fashion group, is to sell its loss-making Jil Sander label to the private equity fund set up by Luc Vandevelde, chairman of the hypermarket operator Carrefour.  

The sale of the brand to Change Capital Partners for an undisclosed sum is a further step in Prada's attempt to refocus on its two most successful lines, Prada and Miu Miu, following unsuccessful acquisitions.  

The deal also underlines the growing importance of private equity as a buyer of luxury goods companies. Funds have recently bought: Jimmy Choo, the shoe maker; Fortunoff, the jeweller; and Neiman Marcus, the upmarket retail group.  

The German designer Jil Sander created her namesake brand in 1975, building a reputation for understated elegance. Prada took control in 1999 and Ms Sander quit in 2000. Although she rejoined in 2003, she left again in 2005.  

The creative director is now Raf Simons, whose first collection of women's clothes for Jil Sander was praised by fashion critics in Milan on Monday, giving weight to claims the label will break even at an operating level this year on sales of more than Euros 140m (Dollars 167m).  

Stephan Lobmeyr, a Change Capital managing director, said that Mr Simons and the rest of the existing management team would continue in their roles and be given stakes in the business. Mr Vandevelde, who used to chair Marks and Spencer, the British retailer, set up London-based Change Capital in 2003 with the financial support of the Halley family, Carrefour's biggest shareholder.  

The fund's investments include: Republic, a fashion chain; Robert Dyas, a DIY retailer; and Hillarys, a maker of window blinds. It aims to own a company for five to seven years typically.  

Mr Lobmeyr said that Prada had already done the more difficult part of restructuring Jil Sander, such as transferring work from Germany to Italy. "The pure turnround part isbasically finished."  

Luxury goods groups generally make more money from handbags than from clothes. Mr Lobmeyr said Change Capital's plan for Jil Sander included an expansion of its small accessories business: "There's big scope to improve that."  

He said that the experience of Mr Vandevelde and his Change Capital colleague Roger Holmes, another Marks and Spencer veteran, would help Jil Sander to improve in areas such as distribution and sourcing.  

Promising not to tamper with the label's "strong brand identity and values", the private equity fund also said it would seek growth in emerging markets. No job cuts are expected.  

Coming so soon after Monday's successful catwalk show, yesterday's deal was greeted with surprise at Milan Fashion Week.  

Averyl Oates, buying director of the Harvey Nichols department store group, said she was "disappointed". "For the first time in a long time they (Jil Sander) had a fantastic season and things looked very positive for the brand".  

Ms Oates said that when a fashion house changed hands there was a danger of it "losing its momentum". However, Terry Jones, editor and founder of i-D magazine, said the deal was potentially "a really smart move" for Change Capital. "Raf Simons already has an established name and reputation."