Elite World S.A.: Information from Answers.com

Company Perspectives
With more than 35 agencies in its network and the most powerful model scouting process in the industry (the Elite Model Look), Elite offers complete international coverage. Thirty-four years after opening its doors in Paris, Elite today manages over 800 models from 5 continents. Its approach to the business is based on a sales force capable of finding new models (such as Vanessa Hessler, Michaela H, Linda Vojtova, Leah Dewavrin) and elevating them to top models (Claudia Schiffer, Yasmine Lebon, Gisèle Bundchen, Linda Evangelista, Naomi Campbell and countless others). The Group's clients are comprised of but not limited to: leading fashion magazines, clothing designers, advertising agencies, fashion photographers. A driving force in the modeling profession and synonymous with modeling prestige, Elite is the world's leading model management company.
Key Dates
1971: John Casablancas founds Elite modeling agency in Paris.
1977: New York office opens.
1983: Look of the Year modeling contest debuts.
1985: Elite represents 350 models, has total bookings estimated at $30 million.
1995: Look of the Year contest renamed Elite Model Look.
1998: Licensing subsidiary established.
1999: Firm reorganized in Luxembourg.
2000: John Casablancas leaves the business.
2004: Stung by lawsuits, firm sells bankrupt New York agency and other U.S. operations.
2006: Company is restructured and begins offering stock on Frankfurt exchange.
2007: Name is changed to Elite World S.A.

Type: Public Company
Address: 54 Boulevard Napoleon Premier, L-2210, Luxembourg
Telephone: (33 0140) 44 32 22
Fax: (33 0140) 44 32 80
Web: http://www.elitemodel-world.com
Employees: 80
Sales: EUR 32.51 million (2006)
Stock Exchanges: Frankfurt
Ticker Symbol: EIM
Incorporated: 1971
NAIC: 711410 Agents and Managers for Artists, Athletes, Entertainers, and Other Public Figures
SIC: 7363 Help Supply Services; 7389 Business Services NEC

Elite World S.A., operates one of the top international modeling agencies, Elite Model Management; sponsors the annual Elite Model Look contest; and licenses the Elite brand name to manufacturers of clothing, eyewear, cosmetics, luggage, and other products. The firm owns nine modeling agencies and has franchised another 30, which are collectively located on five continents. Elite founder John Casablancas is largely responsible for the phenomenon of the supermodel, and over the years its roster has included such famous names as Cindy Crawford, Naomi Campbell, Gisèle Bundchen, and Heidi Klum. Although most of its famous names have moved on and its former U.S. subsidiaries are part of a separate company, the firm continues to represent more than 800 models worldwide.

Beginnings

Elite World's roots date to 1969, when John Casablancas founded a modeling agency in Paris. Born in 1942 to a Spanish industrialist and a model who had settled in New York during the Spanish civil war, Casablancas traveled the globe as his parents pursued their business interests and was educated at a private school in Switzerland. After working for a Brazilian Coca-Cola bottler and Merrill Lynch, he moved to Paris. Casablancas soon started dating Danish model and beauty queen Jeanette Christiansen, who complained to him about the problems she was having with her agency. Inspired to manage her himself, in 1969 he founded an agency called Elysee 3, which would represent about 15 models in all.

Casablancas knew very little about the business, however, and when the organization began to struggle, he brought in his older brother Fernando as a partner. When the two squabbled, Fernando took control of Elysee 3. In 1971 Casablancas decided to found a new agency of his own, which he called Elite. He quickly lured away some of his former agency's best models, including Christiansen, and took a former school classmate, Alain Kittler, as his partner, which allowed him to direct his energies toward finding new clients and promoting the agency.

Though models' fees were at that time typically fixed, Casablancas' agency strove to sign only the most beautiful women and began to charge whatever the market would bear, receiving it because of the extraordinary quality of his models. He developed a stable of top names not only because he boosted their earnings, but also because he pampered them and treated them like stars. Unlike the more staid agencies of the day, he cultivated a youthful aura at his office, playing rock music over speakers in the lobby and keeping a refrigerator full of snacks, sodas, and wine available.

Starting with models Anne Schauffus, Gunilla Lindbald, and Beschka, and clients Dior and Mary Quant, during the 1970s Elite rose to the top of the European modeling world. Casablancas eventually formed a partnership in London called Elite Premier and became an affiliate of the famous Ford agency in New York. However, in 1977 Casablancas and longtime Ford booking agent Monique Pillard founded a branch office in New York that quickly lured away many of her former employer's models, as well as those of other agencies. The spurned agencies soon responded with lawsuits seeking more than $20 million in damages. Most were later dropped, although two were settled by arbitration.

Elite head Casablancas soon moved to New York and made it the firm's headquarters, and began traveling the United States scouting for models, leaving the European operations to partner Gerald Marie. Once a girl had been signed, Elite would train her in posing for the camera and runway. New models were often in their midteens, and the agency provided chaperones for those who moved to New York.

At that time a typical model's fee was $100 per hour or $750 per day, with top names earning double that. The agency took 15 to 20 percent of their wages in exchange for distributing photos and securing bookings. About 600 women and 300 men were employed in New York, with much of the firm's work coming from mail-order catalogs and cosmetics advertisements.

Look of the Year Contest Debuts in 1983

In 1983 the company launched Look of the Year, an international model search that offered as prizes contracts worth $200,000, $150,000, and $100,000 over several years. The contest was promoted through ads in newspapers and magazines in 25 countries. Some 23,000 women entered the first contest, the finals of which were held in Acapulco. Though not a significant moneymaker, the contest would serve as an important source of new models.

During the early 1980s Casablancas also signed partnerships with top agencies in other markets and began developing a chain of more than 100 franchised modeling schools with his brother Fernando, which served as another pipeline of talent. By 1985 Elite represented 350 models, was affiliated with 14 other agencies worldwide, and had total bookings estimated at $30 million. The firm had offices in New York, Chicago, Los Angeles, Paris, London, Copenhagen, Oslo, Milan, Hamburg, Munich, and Tokyo. Elite owned some, while others were partly owned or franchised.

During this period Elite's development of top-name models helped spark a new pop culture phenomenon, the beautiful, pampered, sometimes tempestuous "supermodel." It was exemplified by client Linda Evangelista, who famously said that she would not even get out of bed for less than $10,000. Other top names of the era included Cindy Crawford, Iman, and Naomi Campbell. Although nurtured by Casablancas, they sometimes were true to their image and left after spats or were lured away by other agencies; however, the firm continued to be notorious for poaching from its rivals as well.

In 1994 the company entered the Asian market, selling the rights to China, Hong Kong, and Macao to a group of Hong Kong investors. Elite also signed a deal with Seoul Broadcasting System of Korea to host the finals of the Look of the Year contest, and agreed to produce the debut Shanghai International Fashion Culture Festival. Another new operation was the celebrity division, which represented professional athletes and other well-known names for modeling work. Clients included Ashley Judd, Cameron Diaz, and Drew Barrymore. The firm's billings topped $70 million at that time.

In 1995 Elite Model Management Toronto was formed by the merger of two of that city's top agencies, Elmer Olsen Models and International Top Models. The Look of the Year contest was renamed Elite Model Look during that year, as well.

Casablancas had for some time been licensing the Elite name to manufacturers of clothing and accessories, and in 1995 the firm's Elite Models Fashion unit opened its first clothing store in Paris. More than a dozen licensed outlets followed in Europe, Asia, the Middle East, and the United States over the next several years.

Elite Licensing Founded in 1998

In 1998 a new subsidiary, Elite Licensing Company was created to manage the licensing of the company's name and logo for a variety of fashion and lifestyle products including clothes, luggage, eyewear, and cosmetics. The unit also licensed the name for cafés, beauty salons, and modeling schools. Elite owned a 15 percent stake in ABC Distribution, S.A.S., of France, distributor of some of the licensed goods. During that year the London-based Premier Model Management split from the Elite Group.

By 1999 the firm's revenues included $100 million in billings and $40 million in sales of licensed clothing and accessories endorsed by its clients. Elite had 29 affiliate agencies, employed 250, and represented 500 models worldwide. During the year a new division called Elite 3K was founded to handle the firm's web-based and interactive businesses, launching a new downloadable calendar/organizer loaded with photos of its models. Another affiliate, Illusion 2K, developed a "virtual" model called Webbie Tookay, which was licensed for use in online ads. By this time Elite models were earning from $1,000 to $50,000 per day for print work, $5,000 to $70,000 per day for television commercials, and $100 to $3,000 per hour for runway modeling.

In late November 1999 Elite became embroiled in controversy when the British Broadcasting Corporation (BBC) broadcast secretly shot film of several top executives including Look of the Year head Xavier Moreau making racist comments, and European chief Gerald Marie saying he planned to have sex with several modeling contest finalists, whose average age was 15. Elite and another agency mentioned in the show both took legal action against the BBC, but the firm suspended the four executives shown on tape before the broadcast was shown and sent apologies to models and their parents, calling the actions caught on film "shocking, unacceptable, and highly inappropriate." Marie and Moreau soon resigned, although the firm's European board voted to reinstate them and they later returned.

John Casablancas Leaves in 2000

After an attempt to sell half of Elite's holdings to a Hong Kong investment group fell through, in December 1999 the firm was reorganized in Luxembourg as Elite Model World S.A. In the summer of 2000, 57-year-old founder John Casablancas decided to quit the business, having sold his stake in the company for an amount put at $15 million to Swiss businessman Christian Larpin. He moved with his third wife, a former model, to Rio de Janeiro, where he planned to do scouting for an Elite-affiliated agency there. His franchised chain of John Casablancas Modeling and Career Centers continued to operate as well.

In June 2001 the firm reached an out-of-court settlement with the BBC over its controversial 1999 undercover television program. The BBC publicly acknowledged that Elite warned and protected young models from the dangers of sex and drugs as part of the settlement.

In 2002 Gerald Marie began boosting the firm's efforts to open new agencies around the world, and soon added agencies in Vietnam and India. The cost to join the Elite agency group was reportedly $3.5 million. During the year Elite and a dozen other top New York agencies were sued by a group of models who claimed price-fixing, the taking of kickbacks, and overcharging for commissions and expenses. Most of the defendants settled before the case went to trial, but Elite stood its ground against the suit, which had been given class-action status.

In 2003 the New York agency's legal troubles worsened when it was sued by a former executive who claimed her allergy to secondhand cigarette smoke had not been accommodated, and that she had been fired for complaining. A jury awarded her $5.27 million, including punitive damages, which was later reduced to $4.3 million. The firm quickly appealed the verdict.

Bankrupt New York Agency Sold in 2004

Facing this settlement, and the still-unresolved class-action suit by former models, in February 2004 the U.S. branch of Elite filed for bankruptcy protection. It employed 27 and had taken in revenue of $19.4 million during 2003. The parent company, Elite Model Management Group of Switzerland, was not affected, nor were its 33 other subsidiaries and affiliates.

In August the New York agency's assets were sold at auction to Creative World Management LLC for $7.8 million. The deal included Elite offices in Los Angeles and Miami; 50 percent stakes in the Chicago, Atlanta, and Toronto offices; 60 percent of subsidiary One Model Management; and contracts with many top models. The U.S. unit was allowed to continue using the Elite name and logo, but severed all financial and operational ties to the parent firm in Switzerland.

In the summer Elite Model Management Group reportedly was restructured following a power struggle between Gerald Marie and Christian Larpin. Marie had been fired by Larpin, the firm's main shareholder, but with original Elite partner Alain Kittler had managed to buy out Larpin's stake and resume control of the company. Marie was said by some reports to be backed by Mohammed al Fayed, the owner of London retail giant Harrod's.

In the fall of 2004 an Australia/New Zealand Elite affiliate was formed, and plans were announced to hold the 2005 Elite Model Look finals in Sydney. The contest at that time was held in 50 countries and attracted more than 350,000 contestants. In 2005 a licensed Malaysian office was launched, and in December the verdict in the smoking allergy lawsuit was overturned by an appeals court on technical grounds. The firm was then also liquidating its Elite Model Look subsidiary, although the annual contest would continue to be held.

Firm Goes Public on Frankfurt Market in 2006

In March 2006 Elite Model World was converted from a limited liability company (S.A.R.L.) to a public limited liability company (S.A.), which required the appointment of a board of directors and an independent auditor. A private placement of stock was made on the Frankfurt exchange in May. During the year the American class-action lawsuit was settled for $1.4 million.

In 2006 new agencies opened in Turkey and Marseille, France, the latter calling itself Elite Mediterranee. In the fall the planned finals of Elite Model Look in Thailand were canceled due to political turmoil there, although the event was held in Morocco the following February. For 2006 the firm reported revenues of EUR 32.51 million, and net income of EUR 1.58 million.

Elite had licensed its name to household/beauty products maker Rowenta for the Rowenta Elite Model Look hair styling appliance line, which was distributed in more than 15 countries. Other products using the Elite name included fragrances and a telephone. The company licensed its brand to some 30 companies for use on goods that were sold in 50 countries. Licensing fees at that time amounted to only about 10 percent of the firm's total income, which continued to come primarily from hiring models out for photography and catwalk jobs.

Elite by that time had wholly owned agencies in nine countries, and franchised agencies in 30 others. Key customers included such prestigious fashion companies as Chanel, Dior, Yves Saint Laurent, Victoria's Secret, Donna Karan, Ralph Lauren, and Oscar de la Renta. Though nearly all of its most famous supermodels had long ago left the agency, the firm boasted a roster of 800 models, most of them women. More than two-thirds had been discovered in the Elite Model Look competition, which continued to be held in about 60 countries worldwide.

In February 2007 the firm's name was shortened to Elite World S.A., with Thomas Roggla named nonexecutive director. He reportedly owned 25 percent of the company's shares, and the board, which included Chief Financial Officer Andrew Gleeson and CEO Bernard Hennet, collectively owned more than 50 percent.

February 2007 also saw the firm announce a partnership with Europe Vision to create an Elite branded television network featuring fashion and lifestyle programming around the world, though the plans fell into doubt when Europe Vision suffered financial setbacks later in the year. The company was also working on a television version of its Elite Model Look contest for other networks.

More than 35 years after its founding by John Casablancas, Elite World remained one of the top international modeling agencies. Though its luster had dimmed after the sale of its key New York agency and the defection of many top names like Naomi Campbell and Cindy Crawford, the firm continued to represent a large roster of models through a network of nearly 40 agencies and remained associated with the world's top modeling contest, Elite Model Look. Elite was also working to boost its brand licensing efforts and seeking to raise its profile through increased television exposure.

Principal Subsidiaries

Elite Management S.A. (Spain; 95%); Elite Model Management Amsterdam B.V. (Holland; 80%); Elite Model Management London (U.K.); Elite Model Management S.A.R.L. (Italy; 85%); Elite Model Management S.A.R.L. (France); Nathalie S.A.R.L. (France; 55%); Inmod A.G. (Switzerland); Elite Licensing Company S.A. (Switzerland); Elite Presse/Model Look France (France); Elite Model Management Prague Sro. (Czech Republic; 60%); Elite Model Management Bratislava Sro. (Slovakia; 60%).

Principal Competitors

Models1; IMG; Ford Models, Inc.; Storm Model Management; Select Model Management; Marilyn Agency; Wilhelmina Models, Inc.; Next Model Management; 1 Model Management; MC2 Model Management; DNA Model Management, LLC.

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