Karl Lagerfeld, the creative force behind Chanel for nearly 30 years, is launching a fashion brand under his own name with backing from private equity firm Apax in a bid to tap into the Internet retail market.

The legendary designer in January will start selling online a 'rock chic' brand called Karl, with items priced in the 60 to 300 euro range.

The products will be sold exclusively for the first month through net-a-porter, the online fashion retail unit of Swiss luxury group Richemont, then on a dedicated website and starting in the spring through a few selected retailers.

The move provides further evidence the fashion world is embracing the Internet as an effective medium to sell clothes, communicate with customers and cultivate image.

Consultancy Bain & Co said in a report last week it expected online luxury sales to rise 25 percent in 2011, while the sector's sales globally are forecast to rise 13 percent at constant exchange rates.

Some fashion brands, particularly high-end ones such as Louis Vuitton, have long been reluctant to sell actively online, arguing that Web-based boutiques did not offer the same service and luxury atmosphere as bricks-and-mortar outlets.

Lagerfeld, 78, is also planning to launch in autumn 2012 a more upmarket label called Karl Lagerfeld Paris, sold in multi-brand and department stores, with items priced between 300 and 2,000 euros.

The collections will be distributed and produced under license by Italy's Ittierre, which also holds licenses from Pierre Balmain, Galliano, Costume National and Gianfranco Ferre.

The fashion venture called Karl Lagerfeld BV, controlled by Apax through a majority stake, sees the more accessible line Karl as the main engine of growth, its head said.

We would be disappointed if we did not multiply by four or five our sales within five years, Pier Paolo Righi, chief executive of Karl Lagerfeld BV, told Reuters on Monday.

Financial details were not provided. Righi would only say that Apax's investment in the venture was substantial.

Righi joined Karl Lagerfeld BV in August from Tommy Hilfiger which Apax sold to Philips-Van Heusen last year for 2.2 billion euros.

In addition to designing one-off collections for retailers such as H&M and most recently for the French luxury lighter and pen maker ST Dupont, Lagerfeld is also the creative director of women's ready-to-wear for Fendi, owned by LVMH.

Today, the Karl Lagerfeld brand generates more than 100 million euros ($139 million) through various licensing and co-branding deals, Righi said.

(Reporting by Astrid Wendlandt; Editing by Christian Plumb and Will Waterman)

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