Fashion Business: Reviving Lacroix

For 20 years, the name Christian Lacroix has stood for two things in fashion: complicated clothes and capital losses. But that's about to change. Three American brothers who bought Lacroix from the French luxury group Moët Hennessey-Louis Vuitton (LVMH) two years ago are using their no-nonsense business acumen to reinvent the label. They have pulled the disparate lines into one, cohesive ready-to-wear collection and planned a major expansion into the United States, setting the company on a course to become profitable—for the first time—within two years. "This [restructuring] is what I've always wanted to do," Lacroix says in his immense new showroom in western Paris. "I was on my hands and knees begging my successive presidents at LVMH. It's a complete relief. It's as if I were reborn."

And what a grand entrance he's making. Last week Helen Mirren picked up her Oscar for best actress wearing a Lacroix made-to-order gold lace couture confection. "It held me like two angel hands," she said later. A few days later, Lacroix, 55, presented his streamlined fall-winter 2007-08 womenswear collection in Paris—feminine, dark-hued wool suits and short, jewel-colored satin dresses—and launched a fruity summer fragrance called C'est la Fête (It's Party Time). In April the house will kick off its 20th-anniversary celebrations with an exhibit of Lacroix's clothes at the Villa Noailles museum in Hyères, France, followed by a show of his theater sets and costumes at the national costume museum in Moulins, France, in June. A major exhibition of his work is scheduled to go up at the Musée de la Mode et du Textile in the Louvre in November—the same month Lacroix will inaugurate his first American flagship store, on East 57th Street in New York.

In France, Lacroix's renaissance is already obvious everywhere—from the nationwide Gaumont cinemas and the new TGV trains to Strasbourg, for which he designed the interiors, to the charming 17th-century Hôtel du Petit Moulin in Paris, where every room is done up in Lacroix's signature baroque style. Three more hotels are planned, the first to open down the street from the Musée d'Orsay on the Left Bank in November. Lacroix recently won a competition to design the tramway cars in the southern city of Montpellier—in Mediterranean tones with sea motifs—and he is still busy doing costumes for operas and ballets. Next up: "The Marriage of Figaro" at the Aix-en-Provence festival in July. Lacroix has become so influential in design that in January he was named creator of the year at the prestigious Maison & Objet interior-design trade show in Paris. Last year's recipient was the world-renowned French architect Jean Nouvel. "Not bad, eh?" Lacroix says with a laugh.

Since the takeover by the Florida-based duty-free retailer the Falic (pronounced fay-lick) Group, the changes at Lacroix have been quick and drastic. The company, composed of three brothers from Miami who had made their fortunes with the Perfumania discount fragrance chain and Duty Free Americas stores, hired the French-born, American-educated entrepreneur Nicolas Topiol as Lacroix president. Under Topiol's guidance, Lacroix's lower-priced Bazar and Jeans lines have been dissolved, and the ready-to-wear line is designed to be more readily wearable, featuring basic Capri pants up to pretty lace cocktail dresses, with prices generally ranging from $250 to $4,000. Production quality has been greatly improved. Lacroix opened its first American boutique, in the Forum Shops at Caesars Palace in Las Vegas, last summer, and has plans for more U.S. stores, as well as for perfumes and accessories. The public seems to like what it sees: sales doubled the first season and continue to grow. Topiol hopes to double the company's revenue to $100 million within three years.

For the designer, it's been a long climb back. A student of costume history, Lacroix got his start in fashion after a friend introduced him to some key players in the French couture trade. He worked as a design assistant at Hermès, and later for Jun Ashida, a Tokyo-based fashion company. In 1981 he landed a job as the couturier for the old French house of Jean Patou, the maker of Joy perfume. It was a dream gig: twice a year, during the last years of serious couture buying, he had to turn out a made-to-order collection for the über-rich. His designs were heralded by the critics and sold well, but, he recalls, "I was a bit frustrated not to do something more ... everyday."

In December 1986, Bernard Arnault, a real-estate baron from northern France who had recently entered the luxury business with the purchase of Christian Dior, contacted Lacroix and proposed to set him up in his own company. It would be the first new couture house to be launched in years. Lacroix agreed, sold his name to LVMH and was hired as the house designer. The next month, Lacroix told the owners of Patou that he was leaving in a matter of days; the news didn't go over well. "I didn't go back to the Patou studio," he says. "I left everything, even some clothes." Patou sued and won $2 million from Lacroix in damages; it has not produced another clothing line since.

The house of Lacroix thrived in the early years: the socialites loved his pouf skirts and the vibrant colors of his native Provence. But when minimalism arrived in the early 1990s, Lacroix was at a loss, and sales dropped. His first perfume, C'est la Vie, was a commercial flop. The company's attempt to reach a broader audience with the more youthful Bazar and Jeans lines soon failed, too; the collections grew unwieldy, the designs "heavy and gimmicky," Lacroix says, and production was increasingly poor. "I was embarrassed when I passed women in the street wearing my clothes. They looked like catalog clothes."

The succession of presidents—more than a dozen in 17 years—didn't help matters. "When [the LVMH group] didn't know what to do with someone, they sent them to Lacroix," the designer says. The constant personnel changes made for too many shifts in strategy, and the company continued to lose money. "Bernard Arnault got impatient," Lacroix says. By 2004 the tension had nearly destroyed the designer. "Each morning I put on my samurai mask and prepared myself for everything that came my way," he says. "I was completely paranoid and took everything badly."

Then in December 2004, Arnault called Lacroix with important news: he had convinced the Falic brothers, who had recently acquired Hard Candy and Urban Decay cosmetics from LVMH, to buy the company. In fact, Lacroix later learned, Arnault had already signed the deal with the Falics, effectively selling the company without the designer, who had worked freelance for the brand since 1999. Lacroix negotiated a more secure deal with the Falics, and since then the company has flourished. No one is more thrilled with the turnaround than Lacroix. "I run the company with him," says Topiol. "We are partners in crime." And in their case, at least, it certainly does pay.