French fashion conglomerate LVMH became the owner of a minority stake of the New York-based brand Gabriela Hearst. The amount of the transaction has not been disclosed, however, normally the amount of investment varies from 2 million to 15 million euros.
Designer Gabriela Hearst founded her own brand back in 2015. In April 2018, the brand opened its first offline store on Madison Avenue in New York. Hearst is the winner of the International Woolmark Prize and a member of the American Council of Fashion Designers. Prior to launching her namesake luxury brand, she ran contemporary-priced label Candela for more than a decade. The Gabriela Hearst fashion house as we know it today is a luxury ready-to-wear business based on sharply tailored silhouettes rendered in ultra-expensive fabrics, with a focus on sustainably sourced materials.
Last year the brand generated between $15 and $20 million in sales revenue, just three years since its official launch. It now also includes a robust handbag business, mostly sold direct-to-consumer. In September 2018, the designer hired former Bottega Veneta Americas president Giuseppe Giovannetti as chief executive.
Launched in 2017, LVMH Luxury Ventures is set to invest in emerging brands that have already shown an ability to scale. For example, previous investments include French apothecary brand Officine Universelle Buly and sneaker resale shop Stadium Goods. LVMH Luxury Ventures uses the phrase “already iconic” to describe its targets and Gabriela Hearst is definitely a perfect fit.
The Business of Fashion comments on Gabriela Hearst’s empire:
‘Hearst’s skilful women’s suiting — a notoriously difficult category to crack for emerging designers — has also helped to earn her a fast following. Her elongated trousers and jackets in sumptuous fabrics have, for some retailers, helped to replace the gap left by former Céline designer Phoebe Philo, whose pants were a go-to for fashion-conscious women. Industry heavyweights like MatchesFashion founder Ruth Chapman can often be found wearing one of Hearst’s sets. Hearst’s sleek evening wear also regular appears on red carpets, while Duchess of Sussex Meghan Markle is often seen carrying that famous “Nina” bag’.
Scaling up physical retail would be a logical next step and LVMH contribution can help lead the brand in that direction. Opening more physical stores would allow consumers to touch and feel the product, which is more impressive in person.
News of the investment by a French conglomerate could have an overall positive effect on the American fashion industry. It has struggled in recent years to establish US-based luxury brands that can compete with its European counterparts in terms of positioning, quality and retail distribution. It’s also certainly just the beginning.
Text: Irina Gorskaia
Images: WWD, Vogue UK