A Chinese businesswoman who is an avid buyer of Baccarat glassware added the famed French crystal maker to her collection of business assets on Thursday in a 164 million euro ($189 million) deal. Coco Chu - founder of the Hong Kong-based Fortune Fountain Capital - has completed the acquisition of Baccarat, whose hand-crafted sculptures and champagne flutes have been made since the reign of Louis XV. Baccarat announced that Fortune will buy an 89 percent stake held by the U.S. investment firms Starwood Capital and L Catterton, which have struggled to revive the 250 year-old brand. Baccarat's lustre has faded as it failed to benefit from the explosive growth in demand for luxury items in emerging markets, particularly in Asia. It began falling into the red when the global financial crisis struck in 2008, only once posting a small annual profit until regaining its footing in 2016. During those years investments in new designs and marketing were scaled back as losses accumulated.
"This isn't the kind of growth seen in a luxury company," said Eric Rogue, a union delegate at the company's glassworks in the eastern town of Baccarat, which eventually gave its name to the glassworks founded by royal decree in 1764.
"We're a luxury brand that could be developing much faster than we are now," he told Agence France-Presse (AFP) last month, pointing to annual revenues that have stagnated at around 150 million euros over the past five years. Baccarat's designs are found in temples of taste around the world, its sculptures gracing the storied Crillon Hotel in Paris, its glittering chandeliers hanging in palaces and museums. Prices for a pair of champagne flutes, a stalwart on wealthy wedding registries, start at 300 euros, while a best-selling coffret of six colored tumblers lists for 1,030 euros. This month it unveiled a collection of 100 sculptures of Zinedine Zidane's foot costing 40,000 euros each, with proceeds going to the European Leukodystrophy Association, of which the soccer great is the patron. But Didier Guyot, an accountant hired by union representatives, said Baccarat had failed to build out its e-commerce operations, while recent designs and product renewals have lacked flair. Starwood took control of the company in 2005, later joined by L Catterton, a partner of French luxury conglomerate LVMH. The company appears to have put the years of losses behind it, booking earnings last year of 3.4 million euros on sales of 146 million euros.
"The company should have sales of 500 million euros at least, and I don't see what's stopping it from reaching one billion," Guyot told AFP last month, after months of waiting for Fortune to finalize a deal first announced in June 2017. Baccarat officials said they had not yet secured approval by Chinese regulators for the deal. Fortune has promised to immediately invest 20 to 30 million euros in a drive to expand sales in markets including the United States and Asia.
"I am a Baccarat woman," Chu, a French speaker and reportedly a descendant of a famed Chinese calligrapher, told business daily Les Echos when the proposed deal was announced last year, adding that her goal was "to wake a sleeping beauty."