Rémy Cointreau announced June 1 that it has sealed the deal to sell its Champagne division to Société Européenne de Participations Industrielles (EPI), a French luxury goods firm, for $593 millon. The sale encompasses the Charles and Piper-Heidsieck Champagne labels and production facilities, as well as Piper Sonoma, the U.S. sparkling wine brand. EPI and Rémy have also signed a global distribution agreement for these three brands.
EPI is the holding company of the Descours family, which owns multiple luxury brands, including JM Weston, François Pinet and Michel Perry shoes, Bonpoint children's clothing and Alain Figaret men’s dress shirts. Additionally, the firm owns Château La Verrerie, in the Lubéron area of France’s Rhône Valley.
“EPI is very pleased to acquire both these prestigious Champagne houses," said EPI chairman Christopher Descours, in a statement. "They perfectly complement our other French luxury goods brands. This new initiative will strengthen our commitment to winemaking, initiated 20 years ago with Château La Verrerie.”
Rémy Cointreau announced plans to sell its underperforming Champagne division in November 2010. Global Champagne sales fell during the economic downturn, and Charles and Piper-Heidsieck were particularly hard hit. Their higher-volume label, Piper (about five times the production volume of Charles Heidsieck), lost more than one-third of its sales volume in the two years from 2007 through 2009, and Rémy’s Champagne division reported an operating loss of over $5.5 million at the end of the 2009-2010 financial year.
At the same time, Rémy’s Cognac and spirits divisions' growth skyrocketed, with operating margins of 27.6 percent and 25.8 percent, respectively. "In our opinion the significant capital resources required [for the Champagne division] could be more efficiently employed in our other businesses,” Rémy’s CEO, Jean-Marie Laborde said at the time the plan to sell was announced.
After months of speculation about potential buyers, Rémy entered into exclusive negotiations with EPI in late Feburary. Christopher Descours is grandson of founder Jean-Louis Descours. The family group’s fortune was estimated at $1.02 billion in 2010, and they were recently named France's 50th richest family by the French magazine Challenges. A source close to Descours described him as, “Smart, [a man who] knows the luxury world and has loved Champagne for many years. [He has] passion, knowledge and, of course, enough money to invest in a capital-intensive business.”
Champagne insiders seem generally pleased with the sale, suggesting it’s better to have a new player in the industry rather than have one of the existing large firms grow even larger. Regis Camus, chef de caves for both Charles and Piper-Heidsieck, is highly respected among his peers and in the industry, and unconfirmed reports indicate that Camus will remain in place and no major changes will be made to the houses’ personnel or production.
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