Investigation: A dive into the financing of French eco-fashion hub La Caserne
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Business
Initiated by the City of Paris and supported by big-name companies such as LVMH, Kering, Woolmark and Aigle, La Caserne aims to train young designers in sustainable and responsible fashion. Although the project has been welcomed as a whole, questions have been raised about its financing, and the lack of communication on the subject has given rise to speculation. The development of La Caserne is perceived by some as opaque and the role of the City of Paris and the project's partners as ambiguous.
At the genesis of the Caserne project was Paris' ambition to establish itself as a leader in eco-responsible fashion, one that is acutely aware of the global influence of the French clothing sector. The City made its mark in 2017 when it, alongside its property management company (RIVP), issued a call for projects to renovate one of RIVP’s properties, the Château-Landon barracks, and turn it into an "eco-responsible fashion city house ".
Setting up the project and funding its launch
The project was awarded to Jacques Veyrat, an investor acting on behalf of responsible investment holding company Impala, which is mainly active in the sustainable energy sector. Jacques Veyrat is also the owner of L'Exception concept store, a benchmark in the French fashion industry, which reported sales of 10 million euros in 2021. He saw the city's call for projects as an opportunity to create a space dedicated to the ecological transition, and entrusted the ambitious project to Maëva Bessis, then deputy general manager of L'Exception.
As the main investor, Jacques Veyrat provided 5 million euros in funding for the works and fittings, covering 90 percent of the total project cost. The Île-de-France region also played a significant role with a financial contribution of 300,000 euros in the form of grants to equip a fablab named "LE LAB by IFTH". This space, opened by the Institut Français du Textile et de l'Habillement (IFTH), will support designers in the process of designing, prototyping and evaluating their collections. Following a discussion with La Caserne, FashionUnited was unable to obtain information regarding the remaining 10 percent of funding, or 500,000 euros to be precise, which could potentially come from partners such as LVMH, Kering, Aigle or Woolmark, all of which were also involved in the project.
Did this lack of information about the project's financial partners trigger questions at the 10th arrondissement council meeting in June 2015? Some elected representatives reportedly shared concerns on the opacity surrounding the project's set-up.
"Mrs Vasa feels that the wording of the deliberation is too imprecise on the project as a whole. The impression is that this major project was supported and driven by Jean-Louis Missaka, proposed by Jacques Veyrat's company Impala (former CEO of French telecom Neuf Cegetel provider), which invests in numerous companies in China and is a shareholder in companies providing services to the nuclear, space and aeronautical industries. The partners in this project are also major luxury brands. What's more, the project is being put together in a rather opaque way. There have been only a few consultations and the majority meeting came very late. The project makes no mention of the fact that the ground floor will be a space open to consultation, open to the public and with affordable prices. What's more, it would have been possible to include solidarity textile recycling projects. All these possibilities for openness and consultation are completely absent from this resolution. The resolution also proposes a rent for the incubator tenant of 239 euros per square meter per annum. In comparison, Bichat-Temple is still trying to set up social enterprises and cultural projects in spaces costing 500 euros per square meter. The takeover of the lease by RIVP will mean that it will be taken out of the public domain for 45 years. This will also mean fewer catches for the city on this project ".
In the same press release we read that despite this, "a district mayor must know how to attract projects supported by the city to his area and investors to Paris. When an opportunity like this arises, to reject it is to run the risk of ending his term of office with an empty Château-Landon barracks. This is not Mr Féraud's wish, and he is delighted that a serious prospect has been launched at the start of his term of office ”.
As FashionUnited was writing this article, we received a call from Maeva Bessis late on a Friday afternoon. At last we were able to understand the story from the point of view of the people in charge. "When Jacques Veyrat came to see me, he said: ‘There are three things I'd like you to do: have an impact, be cool, and do not make me lose too much money’”.
Bessis continued: “La Caserne is an investment he fell in love with. When you manage a portfolio as broad as Jacques Veyrat's, you can have projects with returns that are not purely financial. La Caserne is an impact project. Due to a lack of time, we don't respond to all calls for projects. But we'd like to work more closely with the town council. In particular, we'd like to receive more public funding, because what we do is in the public interest. Among other things, we train professionals in eco-responsible fashion, and organise two or three free events a week”.
Concerning the agreements with the city on the rental of the premises, they provide for an annual principal rent of 1.05 million euros excluding tax, as stated in the RIVP consultation press release in 2015, with which the City of Paris signed an emphyteutic lease for a period of 45 years - until October 7, 2060, in return for payment of a fee, including a fixed portion for 15 years and a percentage of the rents for the business incubator.
Privatization and rental to ensure annual income
La Caserne is expected to generate sales of 1.3 million euros in 2022, according to societeinfo.com, a website which collects companies’ data, after officially opening the site in the second half of 2021."We have indeed achieved this sales figure. If you deduct the rent, you can see that the margin is not incredible. So we're adjusting with the privatisation of the premises. We have the potential to break even. We've given ourselves a year to get there," explains Maeva Bessis.
As we noted earlier, La Caserne's main source of current income seems indeed to come from rental income and the privatization from its various spaces. To begin with, there are the spaces rented by the resident brands. The forty start-ups pay an annual rate of 400 euros per square meter, excluding taxes, for spaces ranging from 18 to 300 square meters. Monthly rents thus range from 600 to 10,000 euros. "Rents are capped. They're affordable rates that finance our model," adds Maeva. As far as the partnership between the brands and La Caserne is concerned, it would be interesting to know what percentage, if any, La Caserne and Impala take from the sales made by the start-ups and by the Ora restaurant and Club Carbone, two other permanent partners in the project.
La Caserne mainly generates revenues through the privatization of its various spaces. It offers groups and companies the opportunity to book the seminar room Le Talkroom, the premises of its techno club Le Carbone, the Apartment, the Showroom, the Rooftop, the restaurant, as well as the Courtyard, for rates ranging from 1,200 to 8,400 euros excluding tax.
The Courtyard is frequently booked for events such as the Ateliers 1664, where the beer brand has come to offer tastings, transforming the space into a verdant setting with a blue hexagonal bar. "However, we are selective when it comes to privatisation, taking into account the life of the local area,” explains Maeva. “For example, we recently organised events with Hôtel Mahfouf and Les Ateliers 1664. With Les Ateliers, there were around sixty activities over three weeks, and with Hôtel Mahfouf we welcomed 70,000 people. These were great revenues. However, both events were open to the public. We also calculated that 30 percent of our events were organised free of charge. There's always something to cover, whether it's an inclusive catwalk show organised by an association that needs a venue, or artists who want to exhibit in our stairwells. We make sure that La Caserne is always a lively place, serving as many people as possible.”.
In addition, La Caserne generates revenue through its subscription system, allowing individuals to become members of the La Caserne Club for 99 euros a month or 1,099 euros a year. Ticketing is also available for one-off access to events for 20 euros.
Evolution of La Caserne
So how will La Caserne develop over the coming years? "We're going to continue to develop events and the restaurant as they are our key sources of profitability. What's more, we're going to adapt the concept of the restaurant, whose evening prices were too high for the area. We're going to serve plates at a price ranging from 8 to 16 euros. We want the project to have an impact, to be profitable while at the same time benefiting neighborhood life," concludes the manager.
Known Contributions from Aigle, Kering, Woolmark and LVMH
Aigle, the famous French boot brand, has partnered with Merci Raymond, a company specialising in urban agriculture, to transform the rooftop of La Caserne into a hanging garden with over 250 plants. The aim of the garden is to educate people about the use of dye plants to make natural dyes. As part of this partnership, Aigle has undertaken to donate 10 percent of its profits from private sales and preview sales on its online platform and in shops to Merci Raymond. The collaboration between Aigle and La Caserne includes master classes and speeches by Aigle's CEO, as well as the development of a capsule collection based on the concept of upcycling.
As for Kering, "They are our financing partners. Since the beginning, Kering has helped me to understand the industry's issues and to imagine better ways of working," said Maeva Bessis in an interview, without specifying the terms of the partnership. In addition, the launch of Fashion Our Future in France, Kering's sustainable fashion initiative in partnership with Marie Claire magazine, took place at La Caserne, thereby giving the space considerable visibility. Woolmark Company, a non-profit organization specializing in wool-related technological research, has chosen La Caserne as one of its three Woolmark Development Centers. The brand has a permanent workshop at La Caserne, focusing on innovative and responsible fabrics.
LVMH has made unused fabric scraps from its workshops available to La Caserne's designers, through its Nona Source start-up dedicated to sourcing raw materials.