By Christina Passariello
Afer more than six decades in fashion, designer Pierre Cardin is hanging the "for sale" sign in his shop window.
At 88 years old, Mr. Cardin says he wants to sell his business to ensure it outlives him. "I want to sell it now," Mr. Cardin said in an interview in his corner office overlooking the French presidential palace. "I know I won't be here in a few years and the business needs to continue."
His timing is fortuitous. Ever since luxury-goods giant LVMH Moet Hennessy Louis Vuitton paid richly for Italian jeweler Bulgari SpA in March, valuations of fashion houses have been on the rise. The industry is entering an acquisitive phase for the first time in a decade. Now, other smaller houses such as Jean-Paul Gaultier are also shopping around for investors.
The price Mr. Cardin wants — €1 billion, or $1.46 billion— is a stretch, industry watchers say.
Bankers estimate it could be worth about €200 million—but even that is a guess because of a lack of financial information. Pierre Mallevays, a former LVMH executive who founded the boutique investment advisory Savigny Partners, says it could be worth about four times sales, but it's not clear how much sales are.
Mr. Cardin doesn't have a clear idea about his company's annual sales, which are garnered by some 400 license partners world-wide. "I don't know how much it makes," says the fast-talking couturier, who has no heir. "It's incalculable."
Says Mr. Mallevays, "From a due diligence perspective it's an absolute nightmare, and goes contrary to the fact that he wants a lot of money for it."
A few years ago, Mr. Cardin said he wanted to sell his business for €500 million, but no one came forward. The designer says he's serious about selling this time.
Mr. Cardin isn't the only designer still working way past retirement age. Italy's Giorgio Armani, 76, is at the helm of his fashion house and after a health scare three years ago, his succession has become a more pressing issue. Chanel's Karl Lagerfeld is also well into his seventies, and fashion watchers expect him to pass the torch within the next couple years.
The space-age style Mr. Cardin invented decades ago is experiencing a revival, with androgynous designs in unusual materials including plastic. His influence is clearly seen in younger designers such as Alexander Wang and Balenciaga's Nicolas Ghesquière.
But Cardin's main fashion line is a shadow of what it once was. He has only one boutique, on the ground floor of his Paris headquarters. It doesn't see much customer traffic. He organized a runway show during Paris fashion week last fall for the first time in a decade, but it was a rambling collection that didn't draw any top editors or buyers.
A native of Venice, Mr. Cardin moved to Paris and designed for Christian Dior before launching his own couture house in 1950. In the 1960s, when fashion was shedding the heavy skirts and dresses of the post-war years,
Mr. Cardin made a futuristic statement with linear dresses and pants in stiff wool and plastic. Like other fashion companies such as Dior and Gucci, he parlayed his cachet into licensed products far removed from fashion. But he went much farther, starting from a first license for porcelain crockery in 1968. There are Cardin toilets, strollers and heating units.
Some 20 years ago, however, fashion labels began to realize that too much licensing harmed their global reputation. Now, fashion houses carefully handpick their licenses in areas that are related to the core business: Gucci has a perfume license with Procter & Gamble Co.; Swiss watch giant Compagnie Financière Richemont makes Ralph Lauren timepieces.
Not Pierre Cardin. He continues to farm out his name to thousands of products world-wide.
"He's the extreme of fashion licensing," says Valerie Steele, director of the Museum at the Fashion Institute of Technology in New York. "Though it's been wildly successful for him financially, it has diluted his image."
In recent years, sales and profits at several of Mr. Cardin's subsidiaries have continued to slowly increase, according to the company's public records. Still, there is no global picture of his finances. Making his financial empire more nebulous, he claims to owns a 5% to 10% stake in each of the companies he licenses his brand to, as part of the royalties he collects.
"Look, here's an €8-million contract for some products for Iran and Iraq," he says, shuffling through a thick stack of papers on his desk.
Mr. Cardin says he has always taken care of his own finances. "I don't have a board, I am my own board," he boasts.
Asked how he came up with the billion-euro valuation, he takes out an old greeting card and, scribbling, says, "If I ask €10 million per product, which is nothing at all, per country, multiplied by 1,000, that makes one, two, three...." Dismissing the profusion of zeroes, he concludes, "One thousand products, 100 countries, that's how it calculates. It's nothing."
Mr. Cardin also owns swathes of expensive real estate in central Paris and the south of France, assets that bankers say could make up a chunk of the value of the company. Three of the properties are former shops—money pits, in Mr. Cardin's opinion—that he keeps vacant. "It's more profitable to have them closed than open," he quips.
Mr. Cardin says he has met with an English investor three times, as well as with Chinese and American investors.
There is one major condition for the sale: He isn't ready to hang up his scissors.
"I want to remain as creative director," he says. "It would be in their interest for the brand's image."
