Economy

France’s “Alligator” Brand Wades Into New Waters

Best known for its preppy polo shirts, fashion giant Lacoste is diversifying: targeting women, children and branché (hip) youth in an effort to push yearly earnings toward the 1.5 billion euro mark.

Lacoste, designed in France, made in Peru
Lacoste, designed in France, made in Peru
Nicole Vulser

France's world-famous "alligator brand," Lacoste inaugurated its first renovated flagship store on Paris's Champs-Elysées last week. The first of a new generation of boutiques, the shop will soon have sister outlets in Hamburg, Montreal and New York. "We are also looking for a symbolic location in Shanghai," says Christophe Chenut, CEO of Lacoste SA.

Between now and 2013, the fashion company will refurbish its 1,200 boutiques – to varying degrees. While some shops will get just a simple paint job, others are due for an extreme makeover.

For 10 years the group has been working on more specific product lines. Lacoste will stick with its signature cotton polo, but also introduce technical sporting clothes, a more chic collection called "Le Club," and "Lacoste Live," a line aimed at the branché crowd - young hipsters who love fashion. For this market, about 100 small shops located in fashionable locations such as the Marais neighborhood in Paris, London's Carnaby Street or New York's Soho, will be renovated.

In addition, the brand has just opened its first Parisian branch dedicated to children's clothes, "Lacoste Kids." Next up is the female market. "We're not offering women enough. They represent 80% of our clientele, while 80% of the products we sell are for men," Chenut noted.

The organization of Lacoste SA is an ideal case study. The company, founded in 1933 by tennis champion René Lacoste, has always operated on a system of licensing. Its income comes from royalties of an average of 8% of the bulk sales of its eight license holders. In 2011 it is looking to bring in 1.55 billion euros (a 10% increase from 2010.) Roughly 60% of revenue comes from the sale of clothes (made by Devanlay), 15% from perfumes (Proctor & Gamble) and the same amount from shoes. The remainder comes from glasses, leather goods, household linens and jewelry.

Lacoste and its main license-holder, Devanlay, which also manages the boutiques, are connected by complex capital links. Various heirs of René Lacoste together control 65% of Lacoste SA. The other 35% is owned by the Maus family, which controls 90% of Devanlay. Lacoste SA owns the other 10% of Devanlay.

Since the arrival of José Luis Duran, the former owner of Carrefour, as head of Devanlay in mid-2009, projects are multiplying. The Lacoste shareholders are involved in the management of the group, as are two of the founder's children: Michael Lacoste is president and Catherine Lacoste, a former golf champion, actively supports the company.

Lacoste SA remains an unlisted family group that doesn't publish its results. Despite recurring rumors, the Lacoste heirs don't have any intention of selling. "It's a company where you can build a long-term strategy. Being unlisted, the company isn't subject to the terror of quarterly results," said Chenut.

Faithful to a tradition of innovation -- René Lacoste was a professional tennis player for just five years and an inventor for 50 – Lacoste SA has entrusted designer Christophe Pillet with the company's laboratory. He manages a small team that, in conjunction with industrial partners, develops prototypes of all varieties: bicycles, surf boards, skis and a wooden tennis racquet, among others. They have also ventured into automotive engineering, maybe because René Lacoste's father ran the Spanish automotive company Hispano-Suiza. Some of these objects will be produced in limited edition and sold.

The trendy alligator brand spends between 5 and 10 million euros per year combating counterfeiting, which is often linked to the mafia and money laundering. In addition, more than 100 trials are ongoing against one of Lacoste's rivals, Crocodile international, which has become well established in certain countries. Alligator vs. Crocodile – the battle between the reptile brands has been raging for more than 30 years.

Read the original article in French.

Photo - Phil Roeder

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Economy

Air Next: How A Crypto Scam Collapsed On A Single Spelling Mistake

It is today a proven fraud, nailed by the French stock market watchdog: Air Next resorted to a full range of dubious practices to raise money for a blockchain-powered e-commerce app. But the simplest of errors exposed the scam and limited the damage to investors. A cautionary tale for the crypto economy.

Sky is the crypto limit

Laurence Boisseau

PARIS — Air Next promised to use blockchain technology to revolutionize passenger transport. Should we have read something into its name? In fact, the company was talking a lot of hot air from the start. Air Next turned out to be a scam, with a fake website, false identities, fake criminal records, counterfeited bank certificates, aggressive marketing … real crooks. Thirty-five employees recruited over the summer ranked among its victims, not to mention the few investors who put money in the business.

Maud (not her real name) had always dreamed of working in a start-up. In July, she spotted an ad on Linkedin and was interviewed by videoconference — hardly unusual in the era of COVID and teleworking. She was hired very quickly and signed a permanent work contract. She resigned from her old job, happy to get started on a new adventure.


Others like Maud fell for the bait. At least ten senior managers, coming from major airlines, airports, large French and American corporations, a former police officer … all firmly believed in this project. Some quit their jobs to join; some French expats even made their way back to France.

Share capital of one billion 

The story began last February, when Air Next registered with the Paris Commercial Court. The new company stated it was developing an application that would allow the purchase of airline tickets by using cryptocurrency, at unbeatable prices and with an automatic guarantee in case of cancellation or delay, via a "smart contract" system (a computer protocol that facilitates, verifies and oversees the handling of a contract).

The firm declared a share capital of one billion euros, with offices under construction at 50, Avenue des Champs Elysées, and a president, Philippe Vincent ... which was probably a usurped identity.

Last summer, Air Next started recruiting. The company also wanted to raise money to have the assets on hand to allow passenger compensation. It organized a fundraiser using an ICO, or "Initial Coin Offering", via the issuance of digital tokens, transacted in cryptocurrencies through the blockchain.

While nothing obliged him to do so, the company owner went as far as setting up a file with the AMF, France's stock market regulator which oversees this type of transaction. Seeking the market regulator stamp is optional, but when issued, it gives guarantees to those buying tokens.

screenshot of the typo that revealed the Air Next scam

The infamous typo that brought the Air Next scam down

compta online

Raising Initial Coin Offering 

Then, on Sept. 30, the AMF issued an alert, by way of a press release, on the risks of fraud associated with the ICO, as it suspected some documents to be forgeries. A few hours before that, Air Next had just brought forward by several days the date of its tokens pre-sale.

For employees of the new company, it was a brutal wake-up call. They quickly understood that they had been duped, that they'd bet on the proverbial house of cards. On the investor side, the CEO didn't get beyond an initial fundraising of 150,000 euros. He was hoping to raise millions, but despite his failure, he didn't lose confidence. Challenged by one of his employees on Telegram, he admitted that "many documents provided were false", that "an error cost the life of this project."

What was the "error" he was referring to? A typo in the name of the would-be bank backing the startup. A very small one, at the bottom of the page of the false bank certificate, where the name "Edmond de Rothschild" is misspelled "Edemond".

Finding culprits 

Before the AMF's public alert, websites specializing in crypto-assets had already noted certain inconsistencies. The company had declared a share capital of 1 billion euros, which is an enormous amount. Air Next's CEO also boasted about having discovered bitcoin at a time when only a few geeks knew about cryptocurrency.

Employees and investors filed a complaint. Failing to find the general manager, Julien Leclerc — which might also be a fake name — they started looking for other culprits. They believe that if the Paris Commercial Court hadn't registered the company, no one would have been defrauded.

Beyond the handful of victims, this case is a plea for the implementation of more secure procedures, in an increasingly digital world, particularly following the pandemic. The much touted ICO market is itself a victim, and may find it hard to recover.

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