One of Los Angeles' best-known fashion designers announced Thursday that it was teaming with a French retail giant to produce women's apparel for its European stores.
Vernon-based BCBG Max Azria Group Inc. is partnering with Carrefour, the world's second-largest retailer behind Wal-Mart Stores Inc., in a deal estimated to be worth over $1 billion in sales to BCBG over the next 4 1/2 years.
"To do a deal like this, with the second-largest retailer in the world, is an honor," said Max Azria, the group's chief executive. "Everybody has the right to reach a fashion that they can afford. It's a great challenge for our company to design from the lower prices to the higher prices."
The deal is the latest in a flurry of partnerships between mass merchants and designers to develop exclusive collections.
Carrying the tagline "Designed in Los Angeles, Made for the world," the collection will be in 450 stores in France, Spain, Italy, Belgium, Portugal and Greece by mid-2007, BCBG said.
"It's a big deal from a revenue standpoint," said Frederick Schmitt, a principal at Sage Group, a Los Angeles investment bank that specializes in apparel, retail and branded consumer products. "But I'd be interested in seeing what it looks like in terms of profitability for BCBG."
BCBG is privately held and doesn't disclose its financial results. Azria, who also is the company's founder and designer, said the arrangement with Carrefour was unusual in that the two companies would team up to create a unified women's fashion label for the stores in the six countries.
BCBG, which manufactures clothing worldwide, has 8,000 employees and expects to hire an additional 150 as a result of the deal. About 3,000 of its workers are based in California, including 1,700 in Vernon.
The company designs an array of women's clothing that includes contemporary line BCBGirls and couture gown line Max Azria Atelier. The group has 1,166 stores in 31 countries, including one of its new acquisitions, the 208-store France-based chain Alain Manoukian.
In addition to operating more than 340 BCBG Max Azria retail stores worldwide, the company in August opened the first Max Azria boutique on Melrose Avenue in Los Angeles.
BCBG's Max Rave this year acquired G+G Retail, which operates more than 480 Rave, Rave Girl and G+G stores in the United States and Puerto Rico. Those stores are being converted to Max Rave or True People stores.
With this agreement, Carrefour said it planned to reinforce and boost its apparel offerings at its hypermarkets, which combine groceries with general merchandise similar to Wal-Mart Supercenters.
"This collaboration with an internationally renowned fashion company is integral to the Carrefour group's strategy to further develop its sales in the nonfood sector," said Jose Luis Duran, chairman of Carrefour's management board.
Mass merchants are increasingly turning to designer names to develop exclusive merchandise.
Discounter Target Corp., looking to build on a reputation for affordable fashion, carries exclusive lines from high-end designers Isaac Mizrahi and Cynthia Rowley.
Wal-Mart previously announced a deal with designer Mark Eisen to develop fashions for a segment of its George line.
And in August, Kohl's Corp. announced a partnership with Vera Wang. The designer, known for her $10,000 wedding dresses, will create a new fashion and lifestyle brand called Very Vera by Vera Wang for fall 2007.
J.C. Penney Co. has teamed with designers such as Nicole Miller to develop its own affordable collections.
The Associated Press was used in compiling this report.