In August 1999, upmarket clothing retailer Joseph was sold to Belgian financier Baron Albert Frere for £98m. Known the world over for the understated elegance of its designs, Joseph is also an exceptionally profitable business. Profits have increased by 57% pa, from £2.4m in 1996 to £9.4m in 1999. Sales have increased by 17% pa over the same period to reach £44.6m in 1999. The company, which won the Best Contemporary Collection award at London Fashion Week 2000, was started by Moroccan-born Joseph Ettedgui in a hairdresser-cum-wig shop in London’s King’s Road in 1969. When the bottom fell out of the wig market in the early 1970s, Ettedgui began selling clothes by the then-unknown Paris-based designer called Kenzo. He found strong demand for the knitwear, which delivered better margins than either hairdressing or wigs. By the mid-1970s Joseph had built up a small fashion empire selling other people’s designs and had strengthened his management team by the addition of his two brothers Maurice and Franklin. But the business only became seriously profitable when the trio decided to take design in-house, thereby increasing margins from 10% to 20%. Own-label sales now account for 80% of turnover with the remainder coming from the wholesale business. The growth in profits has enabled the London-based company to fund organic expansion to 25 shops world-wide, with a further 10 franchises, concessions and restaurants.
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