LVMH pays $8.5m for stake in Hewsons' eco-clothing range Edun
French luxury goods group LVMH, which owns brands such as Moet & Chandon and Louis Vuitton, paid more than $8.5m (€6.1m) to acquire a stake in the clothing business established by U2 frontman Bono and his wife Ali Hewson.
But the investment came as Paul Hewson, or Bono, and his wife injected a further $8.9m in the clothing firm as part of the deal.
It is likely that the duo were required to invest additional funds in Edun in order to secure the money from LVMH and that the Hewsons retained control of Edun, probably holding just over 50pc of the firm.
LVMH chief executive Bernard Arnault confirmed in Paris earlier this month that the company was poised to take a stake in ecologically and socially aware clothing group Edun, but declined at the time to say how much the company would invest or what size stake it would take.
New company filings reveal that Sofidiv Ireland, which is controlled by LVMH, paid just over $8.5m for its stake in Dublin-based Edun Apparel.
Established in 2005, Edun (which is 'nude' spelled backwards), sells organic cotton wares that are made in countries such as Kenya, Peru and India.
Latest accounts for Edun Apparel, which are for 2006, show the company had a deficit of almost $10.7m at the end of that year. It had outstanding shareholder loans of $7.9m and bank loans of $3.6m.
A tie-up with LVMH gives Edun access to a formidable marketing machine that it can capitalise on to raise brand awareness and get its products on store shelves and hangers.
LVMH said that its investment in Edun "demonstrates that it's possible to promote fair trade in the fashion industry".
LVMH is the world's largest maker of luxury goods and its stable of products also includes brands such as Dom Perignon champagne, Givenchy and Donna Karan. Listed on the Paris stock exchange, it has a market capitalisation of over $40bn (€29bn).
It posted a slight increase in sales and profits last year. Revenue rose 4pc to €17.2bn in 2008, while full-year profit was virtually unchanged at €2bn.
The company said that its results had been partly hit by currency fluctuations, but its outturn was better than had been expected and beat that of its closest peers. Its diversified operating base has so far helped it to weather the worst effects of the global economic slowdown, although the company shied away from giving forecasts for the current year.