PARIS (Reuters) - Marc Jacobs, the star designer who turned Louis Vuitton from a staid luggage-maker into one of the world's biggest luxury brands, is leaving to focus on floating his own label, a source close to the French company's parent LVMH said on Wednesday.
The move follows a series of leadership changes at Louis Vuitton, LVMH's biggest profit- and revenue-contributor, aimed at helping the brand regain some of its lost prestige after a decline in sales growth over the past year.
"Marc Jacobs is leaving Vuitton and will focus on his own brand," the source said on condition of anonymity.
LVMH and Marc Jacobs declined to comment, but the source said the designer aims to float his business - which is estimated to generate sales of around 500 million euros - in an initial public offering.
"There is an IPO project for the MJ brand," the source told Reuters.
Some industry observers have suggested Jacobs has been encouraged by the success of Michael Kors, the U.S. brand whose shares and sales have been enjoying stellar growth since its IPO late last year.
LVMH owns nearly all of Marc Jacobs International, the operating company, while the trademark ownership is split equally between LVMH, Jacobs and Jacobs' partner Robert Duffy.
"Marc Jacobs' departure is not a big surprise," said analyst Antoine Belge at HSBC. "But if the IPO is confirmed, LVMH will lose one of its fastest growing brands."
LVMH shares were down 2.3 percent in late trading in Paris.
COOLING DEMAND
Jacobs' departure after 16 years with the company comes a month after LVMH founder and chief executive Bernard Arnault appointed his daughter Delphine as deputy head of Louis Vuitton and replaced last year longstanding chief Yves Carcelle with group veteran Michael Burke.
Louis Vuitton, which built its name and profitability on its LV-embossed canvas bags, has been suffering from cooling demand in Asia and consumers' growing preference for no-logo products.
Over the past year, the brand has put brakes on its expansion to preserve its exclusivity in response to fears it was becoming too ubiquitous, which contributed to its sales growth halving to around 5 percent.
Last month, it hired accessories designer Darren Spaziani, formerly with Proenza Schouler, to strengthen its high-end offering of leather bags.
Nicolas Ghesquiere, a darling of fashion editors, who left Balenciaga last year after having successfully revamped the Kering fashion brand, is seen as a frontrunner to replace Jacobs.
"It would be a positive sign if Ghesquiere joined Louis Vuitton as he is one of the most coveted designers today and he would give a creative jolt to the brand," said David Da Maia, analyst at brokerage Aurel BGC in Paris.
Arnault has been regularly changing the creative and management teams of his fashion brands to refresh their style and drive expansion.
LVMH's Celine has been doing well since award-winning designer Phoebe Philo took its creative helm in 2008 while Riccardo Tisci has brought new vitality to Givenchy since his appointment in 2005.
THEATRICAL SHOWS
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