>> Rumor: LVMH May Sell DKNY, Make Bid On Hermes —Word is that LVMH is shopping around DKNY, with no plans to sell Donna Karan Collection, because it wants to focus on high-end luxury brands with a strong international recognition; DKNY's only response was to state that long-term company policy is to not comment on rumors.  European private investment firms are also buzzing that in addition to dropping DKNY, LVMH may be selling Moet-Hennessy to make a grab for Hermes. [Fashionista, DKNY Twitter]  

>> In the wake of the 23 percent decline in first-half profits it announced Monday, LVMH plans to postpone or suspend marketing and promotions for its brands that failed to be top performers, according to CFO Jean-Jacques Guiony.  

He did not specify which brands would receive the "selective investments" still being made, but its wines, spirits, watches, and jewelry businesses were hurt in the past few months and seem like contenders for those being passed over. This new withholding strategy is part of LVMH's cost containment plan for the remainder of 2009.

So which fashion brands might be affected? »

>> Bernard Arnault, Francois Pinault Are Playing Nice, Still Rich —With the lapse of almost a decade since the fight over Gucci, LVMH's Bernard Arnault and PPR's Francois Pinault are experiencing a detente, symbolized by their willingness to appear on the cover of French business magazine Challenges together this week.  The accompanying story credits Arnault's wife, Helene, with the warming of feelings when she embraced Pinault's wife Maryvonne at an event last November.  Since, the Arnaults invited the Pinaults to dinner on May 26. The magazine also tabulates France's largest fortunes, with Arnault (14.58 billion euros) in second, the Hermes family (7.68bn euros) in fourth, Pinault (4.95bn euros) in sixth, and Alain Wertheimer and family, owner of Chanel, (3.5bn euros) in tenth. [WWD]

>> THE ZEITGEIST —Cathy Horyn just posted an insightful state of the union-type speech that she made a few nights ago, focusing on fashion and some of the economic challenges facing the industry.  Among the highlights: "'Green fashion' will become more and more important, and young consumers in particular will expect to see innovation and experimentation in this area . . . I am somewhat surprised that a big luxury group has not had the foresight to create a separate eco-brand of high-quality garments, with a casual yet sophisticated aesthetic. We’ve seen a number of niche labels, but not one that draws on the brand power and advertising reach of a luxury group." Perhaps that is precisely what LVMH has in mind for new investment Edun? [On the Runway]

>> For months, Bernard Arnault has been hovering around an unnamed ethical fashion brand — many guessed Bono and his wife Ali Hewson's label Edun, but she denied it outright back in March.

Turns out it was all a ruse — at the LVMH annual shareholder's meeting Thursday morning, Arnault said the company will announce "very soon" that it has taken an "important" stake in the eco-luxury label — LVMH is expected to remain a minority shareholder, but their stake is to be nearly 50 percent.  As part of the deal, LVMH will play a "very active role" in the development of Edun as a brand, including management of the company as well as granting access to its marketing and production resources.

The Edun investment marks the first foray by a major fashion conglomerate into the ethical fashion market.

>> INSIDER WIRE —Speaking of ethical fashion, Ali Hewson addressed rumors about LVMH taking a financial interest in Edun last night — "Everyone keeps asking us that. I wish it were true."  Which begs the question: Who else would Bernard Arnault have been hinting at?  Edun seems to fit the bill perfectly . . . [Style File]

*image: source

>> ON THE CAMPAIGN TRAIL —Little by little, Rodarte is making a foray into the advertising world — first with an ad in the Winter edition of Anthem, and now for Spring 2009 in the latest issue of V Magazine (#58), at left.  Are Laura and Kate Mulleavy considering going more commercial?  If they're receiving LVMH mentoring like Gareth Pugh, they just might be — Gareth has been working on making his pieces more wearable recently. [Fashion Copious, Fashion Copious]

>> So just how does the richest man in France, and one of the most powerful in fashion, do it?  A profile in the March 2009 issue of WSJ. gives us a clue about the dealings of Bernard Arnault, CEO of LVMH, who Anna Wintour says "has a very strong understanding of what [his] designers do. If he’s concerned about something, he’ll speak up, but he’ll never tell them, ‘Do this’ or ‘Do that.”

But he will give them a strong hint.  When John Galliano was presenting the Pre-Fall 2009 collection to buyers in Paris, Arnault came to oversee.  Twenty-three models are escorted in for Arnault's perusal, and Galliano "reads nervously in English from a prepared speech to explain the source of his inspiration: Dior seen through the erotic lens of photographer Helmut Newton":

Arnault, seated on a white sofa, focuses on two ingredients: Is the piece “Dior” enough and is it priced right? “Ah, this is true Dior,” he states definitively of a black waist-cinched suit with pleated pockets. “It’s Dior safari,” he says of a beige coat with fox-fur collar. A skirt suit in Prince of Wales check appears: “The Dior woman will like this and will want to come back season after season,” he says.

"Ça, c’est beau — how much is it?” Arnault asks as a tall blond model stands before him in a $1,500 red double-face wool dress. “Will that sell?” he asks of an embroidered $15,000 cream-colored gown. (The answer was yes, in Monaco, Hong Kong and Moscow.) “Why not use those black masks for the ad campaign?” “If you tell me so, sir,” Galliano answers.

Now about those pesky plastic pendants »