LVMH exiting its partnership with Edun
today Jun 28, 2018
A spokesman for LVMH confirmed that LVMH, the fashion industry’s largest conglomerate, would effectively return its stake in Edun for no financial consideration.
The brand’s single free-standing boutique at 265 Lafayette Street, in a prime shopping area in New York, had already shuttered last month; and there appear to be no immediate plans to produce any more collections.
“In light of a joint review of the business, Edun is restructuring its operations in preparation for its next chapter and LVMH will transfer its shares back to the founders. The founders remain committed to Edun’s mission for sustainable fashion and thank LVMH for its support and dedication during this journey together,” LVMH said in a statement.
The brand – launched with much fanfare in 2004 – has been loss-making for many years. According to accounts filed with Ireland’s Companies Office, Edun suffered a loss of €5.3 million in 2016. That meant the firm has accumulated losses of a huge €65.8 million in total since opening. Those accounts also show that net liabilities rose from €43.4 million to €47.9 million during the latest year.
Founded to effect positive change in Africa by promoting trade there and sourcing production throughout the continent, Edun was essentially funded by “shareholder loans,” the 2016 accounts show.
LVMH, which controls mega brands like Louis Vuitton and Christian Dior, first invested in Edun back in 2009, taking a 49% stake in the business.
Under LVMH’s guidance, Edun changed designers bringing in another Irish person, Ulsterwoman Sharon Wauchob, to replace the original designer Rogan Gregory, an artist best known for his directional jeans.
Again at LVMH’s prodding, Edun changed direction in 2013 nominating Danielle Sherman as creative director. Though she subsequently resigned in 2016, and design was handed to a “collective” of designers.
Back when he first invested, LVMH Chairman Bernard Arnault insisted: "LVMH shares the vision and ethical values of Edun, a pioneer in ethical apparel, and its founders.” At the time, Edun sourced its products from small plants in various corners of the world including India, Peru, Tunisia, Kenya, Uganda, Lesotho, Madagascar and Tanzania.
"Our group is proud to contribute to the operational development of Edun's activities, and of the local communities. LVMH is committed to advancing both the social and environmental aspects of sustainable development, which plays an intrinsic role in the development of our brands," continued Arnault.
Shortly after, Bono and Ali appeared in the Vuitton Core Value ad campaign shot by Annie Leibovitz, landing in a private plane in Africa in Edun clothes and LV handbags.
However, LVMH sources now describe Edun as a brand ahead of its time, and perhaps the first ecological brand. Executives at LVMH have always argued that Edun represented a learning curve for the group, in terms of better understanding developing markets in Africa, and better comprehending the growing ecological movement in fashion.
Throughout its history, Edun received significant support from fashion magazines and media, intrigued by a mega rock star’s involvement. However, LVMH is understood to have been frustrated by the lack of growth, and the failure of Edun to win significant orders from either department stores or specialty boutiques.
Hence, after nearly nine years together and multiple years of losses, Arnault clearly felt he had paid enough for this class in alternative fashion.
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