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French crystal maker Baccarat joins Chinese magnate’s collection
PARIS, June 22, 2018 (BSS/AFP) – A Chinese businesswoman who is an avid
buyer of Baccarat glassware added the famed French crystal maker to her
collection of business assets on Thursday in a 164-million-euro ($189
million) deal.
Coco Chu — founder of the Hong Kong-based Fortune Fountain Capital — has
completed the acquisition of Baccarat, whose hand-crafted sculptures and
champagne flutes have been made since the reign of Louis XV.
Baccarat announced that Fortune will buy an 89 percent stake held by the
US investment firms Starwood Capital and L Catterton,which have struggled to
revive the 250-year-old brand.
Baccarat’s lustre has faded as it failed to benefit from the explosive
growth in demand for luxury items in emerging markets, particularly in Asia.
It began falling into the red when the global financial crisis struck in
2008, only once posting a small annual profit until regaining its footing in
2016.
During those years investments in new designs and marketing were scaled
back as losses accumulated.
“This isn’t the kind of growth seen in a luxury company,” said Eric Rogue,
a union delegate at the company’s glassworks in the eastern town of Baccarat,
which eventually gave its name to the glassworks founded by royal decree in
1764.
“We’re a luxury brand that could be developing much faster than we are
now,” he told AFP last month, pointing to annual revenues that have stagnated
at around 150 million euros over the past five years.
– ‘Sleeping beauty’ –
Baccarat’s designs are found in temples of taste around the world, its
sculptures gracing the storied Crillon Hotel in Paris, its glittering
chandeliers hanging in palaces and museums.
Prices for a pair of champagne flutes — a stalwart on wealthy wedding
registries — start at 300 euros, while a best-selling coffret of six
coloured tumblers lists for 1,030 euros.
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This month it unveiled a collection of 100 sculptures of Zinedine Zidane’s
foot costing 40,000 euros each, with proceeds going to the European
Leukodystrophy Association, of which the soccer great is the patron.
But Didier Guyot, an accountant hired by union representatives, said
Baccarat had failed to build out its e-commerce operations, while recent
designs and product renewals have lacked flair.
Starwood took control of the company in 2005, later joined by L Catterton,
a partner of French luxury conglomerate LVMH.
The company appears to have put the years of losses behind it, booking
earnings last year of 3.4 million euros on sales of 146 million euros.
“The company should have sales of 500 million euros at least, and I don’t
see what’s stopping it from reaching one billion,” Guyot told AFP last month,
after months of waiting for Fortune to finalise a deal first announced in
June 2017.
Baccarat officials said they had not yet secured approval by Chinese
regulators for the deal.
Fortune has promised to immediately invest 20 to 30 million euros in a
drive to expand sales in markets including the United States and Asia.
“I am a Baccarat woman,” Chu, a French speaker and reportedly a descendent
of a famed Chinese calligrapher, told business daily Les Echos when the
proposed deal was announced last year, adding that her goal was “to wake a
sleeping beauty”.
The company’s 500 employees as well as individual investors — who will
also be offered the same 222.70 euros per share as the US firms — may get
more details on Chu’s plans at the group’s annual shareholders meeting on
June 29.
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