Crisis on the Catwalk

At least along the runways, the stars were in alignment last week. The usual stable of celebrities and editors lined the front rows at the couture shows in Paris. Sofia Coppola ogled John Galliano's Empire-waist Josephine dresses at Dior. At Armani's haute-couture debut, Penélope Cruz perused her options for the red carpets at this year's awards ceremonies. Even Vogue editor Anna Wintour was back in town after sitting out the past two spring couture seasons. But those who wanted to see the real action needed to keep an eye on the new faces in the crowd.

Among the ones to watch were those of three brothers from Florida who were attending their first haute-couture parade. Just one day after buying the house of Christian Lacroix from the French luxury group LVMH for an undisclosed sum, Simon, Jerome and Leon Falic took their seats at their new employee's show. It was among the most anticipated events on the week's calendar, not just because of Lacroix's reputation as one of fashion's most intriguing talents but also because talk of the LVMH-Falic deal had been circulating since early January. The Falics, who own a chain of airport duty-free shops, have no previous experience running a fashion house. The looming question: Would they allow Lacroix to continue his haute-couture line which, like most others, is a perennial money loser? Or was their aim to milk Lacroix's name to cash in on his ready-to-wear clothes and accessories or introduce assorted baubles?

That three newcomers suddenly hold such sway over the future of haute couture--the handcrafted, custom-made clothes that purists consider fashion's highest art form--was just one of many reminders last week of the fashion industry's turmoil. And the dislocations are by no means confined to the rarefied levels of couture. Tremors are shaking up ready-to-wear too. In the late 1990s luxury groups like Gucci and Prada began snapping up stakes in labels by ultracool but often young and untested designers. Now the money men are losing patience and no longer want to wait for a hefty return on their investments. At the same time, restive designers are tiring of bottom-line pressures from their conglomerate owners or are frustrated by what they see as insufficient financial support from them.

So last week, Helmut Lang, the Austrian-born ready-to-wear designer and reigning minimalist of the '90s, resigned from his own company, which is owned by the Prada Group. The move ended a feud with Prada CEO Patrizio Bertelli over how to reverse losses at Lang's line. In the mid-'90s, Lang's sales were as high as $100 million. When he sold a 51% stake in his namesake brand in 1999, Lang touted Bertelli as a guy who "understands the culture of a high-end product," and said, "His line is very, very well managed." Bertelli, who later purchased the remaining 49% of the brand, was just as excited about the combination. His big plans for the Lang line included Prada-produced accessories, a beefed up advertising budget and at least a dozen freestanding stores in the U.S., Europe and Asia. Instead, Bertelli is left with a house in which business dropped to $37 million in 2003 and the task of making the Lang brand profitable without Lang.