EXCLUSIVE: Karl Lagerfeld Developing Lower-Priced Line for Macy’s

Just in time for a certain famous Thanksgiving Day Parade comes news that is sure to elicit gratitude among fashion fans: designer Karl Lagerfeld will soon unveil a fashion venture with Macy’s, multiple sources told UnBeige. We hear that the national retailer has inked a deal with the Karl Lagerfeld brand, owned by private equity firm Apax Partners, for an affordably priced ready-to-wear line that will range from jeans to gowns. The new line, slated to launch with a collection for fall 2011, is also expected to include a major online component, with e-commerce as a key distribution channel.

Speculation about the venture has been rampant since early September, when Lagerfeld announced that he would not be showing his signature collection during Paris Fashion Week and instead had a fast fashion line in the works. At the time, Apax said that they were talking with several potential partners for the new “masstige” play. “I wanted this for a long time,” Lagerfeld told WWD in September. “I prefer to work in another way. I can’t compete with Chanel. I don’t want to be the poor child of myself. This has been my vision for years.”

Our calls to Apax and Macy’s were not immediately returned, but according to our sources, production of the new accessibly priced Lagerfeld collection will be handled by Li & Fung, the Hong Kong-based sourcing giant that has been on a deal spree in recent months. The global supplier, which has worked extensively with Macy’s, recently inked agreements to produce lines for stylist Rachel Zoe, Sean “Diddy” Combs, and celebrity couple Jennifer Lopez and Marc Anthony (for Kohl’s).

A matchup of Lagerfeld with Macy’s and Li & Fung recalls other deals masterminded by Apax, which acquired Karl Lagerfeld SAS as part of its 2006 buyout of Tommy Hilfiger. The private equity firm paid $1.6 billion to take Hilfiger private and in 2007 sold the company’s global sourcing operations to Li & Fung for $247.8 million in cash. That same year, Apax-owned Hilfiger signed an exclusive distribution agreement with Macy’s for men’s and women’s sportswear. Apax has since cashed out of Hilfiger—selling the business to Phillips-Van Heusen for $3 billion in May of this year—but retained control of the Lagerfeld brand.

Hilfiger-style exclusive deals have increasingly been a focus for Macy’s, which operates around 810 Macy’s department stores in 45 states, the District of Columbia, Guam, and Puerto Rico. Among the latest entrants into the Macy’s-exclusive brand stable are Rachel Rachel Roy (launched in 2009) and Material Girl, the juniors line developed in conjunction with Madonna that Macy’s CEO Terry Lundgren has called “a big, gigantic home run.”

Meanwhile, the Macy’s deal would mark a return to fast fashion for Lagerfeld, who was among the pioneers of the high-low retail combo dubbed “masstige.” In 2004, the designer teamed with H&M on a collection for women and men that ranged from the designer’s favorite starched white shirts and narrowly cut knits to dresses of layered organza and a unisex fragrance called “Liquid Karl.” The one-off collection sold out in H&M stores worldwide.

“My concept of ready-to-wear today, at whatever level, is that it has to be as good as the most expensive brand,” said Lagerfeld in 2004 of the H&M deal. “Design is very important, and design is not a question of price anymore.” Meanwhile, the designer clearly remains a fan of fast fashion. “We live in the age of jeans,” Lagerfeld told WWD last month. “It’s funny for a person who has money to buy something inexpensive and it’s great for a person with not so much money to be able to get something by a designer….It’s the new snobbism.”