Liberty chief executive Geoffroy de La Bourdonnaye has declared a “new beginning” for its Liberty of London brand and said it will become the fourth and final part of the business to become profitable after signing its first licensing deal this week.
Speaking to Drapers, De La Bourdonnaye said the deal for its Lberty of London menswear business, with Italian manufacturer Slowear, would give the brand scale and profitability overseas.
The London department store, which moved a step closer to being bought by private equity business BlueGem Capital in a £32m deal this week after completing the sale and leaseback deal on its Great Marlborough Street store, reined in expansion of Liberty of London after closing down the brand’s standalone store in Sloane Street in June. Liberty of London creative director Tamara Salman exited the business in February. De La Bourdonnaye said: “The fabrics part of the Liberty business and the store are profitable, online will become profitable this year, and with this deal with Slowear, that Liberty of London division will be profitable.”
He added that a licensing deal for its Liberty of London womenswear business would follow.
The Slowear deal to produce a Liberty of London menswear collection under licence for spring 11 will expand the core of shirts, scarves and knitwear into trousers and outerwear. The collection will be sold in the iconic department store on Great Marlborough Street and via a further 200 doors in the UK, US, Italy and Asia, in particular Japan, Hong Kong and South Korea.
Sales at the store rose 40% to £26m in the first four months of this year.
Liberty broke into positive EBITDA for the six months to June 30, recording EBITDA of £30,000 against a £2.7m loss in the equivalent period of the previous year.
An industry source said: “The fabric business makes around £5m, but every penny it makes the store ate up. You could make the store work better and it is easy to see how you could get the business as a whole to £10m to £15m EBITDA pretty easily. The fashion offer has been a bit too niche. It needs a few anchor brands in there. Yes, it was built on avant-garde labels and should retain a sense of that, but the range has no great substance.”