Fashion Exec Fights for Look at Company’s Books

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Fashion Exec Fights for Look at Company’s Books
BCBG’s Max Azria at the 2009 Milken Institute Global Conference.

Fashion mogul Max Azria is mired in a partnership dispute involving an unlikely side venture – a startup that sells Playboy-branded condoms.

The chairman and founder of Vernon’s BCBG Max Azria Group Inc. claims the condom company he quietly co-founded last year has shut him out and he’s pushing for management at little-known United Medical Devices LLC in Beverly Hills to open up its books to see where the money’s going.

Most startups would jump at the chance to work with a figure like Azria, who has wide knowledge and experience in retail, but United Medical Devices’ officers allege he never followed through on promises to provide financing and business connections, and may not own the 20 percent he claims.

“There’s a dispute as to whether Mr. Azria owns any of the company,” said Peter Ross, an attorney who represents United Medical Devices.

The company’s secret weapon: a license from Playboy. United Medical Devices has an exclusive agreement to design, contract the manufacturing for, and distribute Playboy-branded condoms.

Azria’s name wasn’t mentioned in press releases or any other marketing of the product when it launched last fall, but the dispute recently moved into court in the form of Azria’s lawsuit, revealing his involvement.

The news comes as a surprise to fashion industry insiders. Azria is well known for his range of more than 20 apparel brands, but not outside of fashion.

What’s more, the condom industry is not the kind of industry he might want to be associated with, said Ilse Metchek, president of the California Fashion Association, a downtown trade group.

“It’s far afield from anything that I would think Max would start up with,” Metchek said. “His brand is BCBG’s most important asset, and most people who have a brand like that protect it by watching what they invest in. I doubt very, very seriously he would have wanted his name associated with this product.”

Azria’s attorney and a BCBG spokeswoman did not respond to repeated requests for comment for this article.

The Max Azria named in court documents lists his business address as the Vernon headquarters of BCBG. Ross also confirmed the Azria named in court documents is the BCBG chairman.

Dinner table idea

Ross said the idea for the venture arose from a dinner table conversation in 2009 between Azria and Jimmy Esebag, who heads up licensing for Playboy.

Both Azria and Esebag are French businessmen living in the L.A. area. They brought in another local French businessman, Patrick Bertranou of Camden Healthcare LLC in Beverly Hills, to be the startup’s chief executive. The partnership agreement called for Camden to take an 80 percent stake and Azria to take 20 percent.

Azria was supposed to help finance the company and use his connections to get the product into chains such as Walmart and European retailer Carrefour – both of which have carried BCBG product lines – but never followed through, Ross alleged.

Esebag and Bertranou did not return requests for comment.

In court filings, Azria has asserted he is still a 20 percent owner and he questioned money paid or promised to Esebag.

Ross, who also represents Esebag and Bertranou, said Esebag had been retained by United Medical Devices to find distributors.

A spokeswoman for Playboy said the dispute did not involve the company, and declined to comment further.

Putting the Playboy bunny on condom packaging may sound like a lucrative marriage of brand and product, but it’s far from a sure thing – and has failed previously. In the mid-’90s, an Illinois company, MBf Usa Inc. started selling a line of Playboy condoms, but the product never caught on and quickly vanished.

Adding to the challenge, United Medical Devices has already run into problems with distributors. It recently terminated a contract with one, PlaySafe LLC in Utah, prompting another legal battle. That case is still pending.

Bill Howe, a condom industry consultant in Canal Fulton, Ohio, said it’s extremely difficult for startups to break into the $750 million U.S. condom market. Church and Dwight Co. Inc. in Princeton, N.J., maker of the Trojan brand, owns about 75 percent of the market.

“If it’s just going to be a ‘me too’-type of business model trying to get shelf space,” Howe said, “that’s going to be an uphill climb.”

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