S. Korea: Italy's Hot New Couturier Has an Unfamiliar Ring (Samsung into high fashion)

WSJ ^ | 02/21/08 | RACHEL DODES and SUNGHA PARK

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Italy's Hot New Couturier Has an Unfamiliar Ring

By RACHEL DODES and SUNGHA PARK

February 21, 2008; Page B1

In a recent advertising spread in Italian Vogue, a model poses while the contents of her handbag -- including several cellphones -- spill into the street. A caption explains that she is wearing "tutto Derercuny."

Not quite "all Derercuny." There is Samsung in there, too. Unbeknownst to many followers of high fashion, Derercuny, a three-year-old Italian label that is garnering attention during this week's Milan fashion shows, is part of South Korea's sprawling Samsung Group. Best known for Samsung Electronics Co., the world's largest seller of televisions and second-largest seller of cellphones, the group also includes Cheil Industries Co., a huge textile and chemicals concern that owns Derercuny directly.

Derercuny's Korean-born designer, Mina Lee, who unveiled her latest collection Sunday during Milan fashion week, says the fit isn't as odd as it sounds. For Cheil, which posted $3.1 billion in sales last year, entering the notoriously unpredictable high-fashion business is part of a new strategy to diversify away from its entrenched bulk textiles business, where China and India have a competitive advantage, and from its more recent forays into moderately priced apparel. Instead, Cheil hopes to gain international cachet and realize higher profit margins by developing luxury brands. (See more on Milan fashion week.2)