Printemps is said to be in talks with Qatari Investors, in a deal worth €2 billion
Speculation is rife when it comes to M&A activity in the luxury industry, as record-revenue rates begin to slow and leading conglomerates look at ways in which to continue economically defiant results. LVMH continues to be an on-going subject of discussion, following its acquisition of mega-brand Bulgari in 2011, somewhat sly investment in Hermès and its increasing need to protect brands like Louis Vuitton and Dior from overexposure.
Sources recently interviewed by Bloomberg speculated that both Tiffany & Co and Burberry are two logical candidates for acquisition, which could increase revenue while LVMH works on repositioning the Louis Vuitton brand.
John Guy, a London-based analyst at Berenberg, went on to explain that the purchase of another ‘blockbuster’ brand could allow LVMH to reduce its reliance on smaller labels such as Fendi and Celine, and develop its other fashion lines, about half of which he estimates are not yet profitable.
In the meantime, the brand has taken on a majority stake in couture house Maxime Simoens, where Dior CEO Sidney Toledano will provide coaching to the designers’ team, covering business, strategy and operations.
The announcement came shortly after Kering (PPR) confirmed its acquisition of British designed Christopher Kane, in what could signal a new round of conglomerate interest in independent contemporary fashion brands. Given Net-a-Porter’s almost unrivalled access to emerging fashion designers through it’s e-Commerce portal, it could be interesting to see if Richemont follows suit.
In the meantime, here are The Latest Investments in our ever-evolving industry.
Speculation: Qatari Holding, Printemps
A group of Qatari investors has reportedly offered up to €2 billion for French department store Printemps, currently 70% owned by Deutsche Bank real estate investment unit RREEF and 30% by the Borletti Group.
The deal would be executed by Qatar Holding through its Luxembourg-registered Divine Investments (Disa), the operating arm of the nation’s sovereign fund Qatar Investment Authority.
Source: Fashion United
Offer: Gucci, Richard Ginori
Gucci has made an offer of €13 million to save historic Tuscan tableware company Richard Ginori from bankruptcy. The offer would also save the jobs of Richard Ginori’s 230 workers, who otherwise face dismissal as the company filed for bankruptcy earlier this year.
Source: Market Watch
Stake: Maxime Simoens, LVMH
LVMH Moet Hennessy Louis Vuitton has purchased a minority stake in the label of young French designer Maxime Simoëns. LVMH is said to have invested in the brand, “in order to help accelerate its development,” whilst the designer maintains control of his eponymous label.
Versace may consider opening the company to outside investors to help fund expansion in overseas market its chief executive has expressed. “The family is now aware that we need to seize the moment and fund our growth,” explained CEO Gian Giacomo Ferraris. “We are asking ourselves how fast we could go if instead of a Mercedes we owned a Ferrari.”
Increased: Qatar, Tiffany & Co
Qatar’s sovereign wealth fund had acquired an additional 3.2 million shares of Tiffany & Co., giving it a total of 14.3 million shares, according to a regulatory filing. That boosts the country’s stake in Tiffany to 11.3% from 8.7% as of Dec. 31 2012.
Stake: Farfetch, Condé Nast
Publishing group Condé Nast has emerged as the major player in a $20 million investment in Farfetch, an aggregated shopping platform for luxury goods. “This investment will fuel our entry to new markets while assisting our growth in existing ones," explained José Neves, founder and CEO of Farfetch.
Acquired: Fabbrica Quadranti, Gucci
Gucci Timepieces & Jewellery has acquired Swiss dial maker and long-time supplier Fabbrica Quadranti. Joint ventures between the companies will enable Gucci to invest in new staff and equipment at Fabbrica Quaranti in hopes of increasing production output and bringing back some operations that are currently subcontracted.
Source: Retail Jeweller
Capital: Rent the Runway
Rent the Runway has announced the expansion of its Series C round of funding, bringing the total amount raised to $24.4 million. The initial round was led by Advance Publications, Inc., parent company of Condé Nast and now includes American Express and Novel TMT Ventures.
Source: Market Watch
Stake: Buccellati, Clessidra
Italian investment fund Clessidra has acquired a 70% stake in luxury jewellery Buccellati, for a reported €80 million. The Buccellati family remains involved in the business – Gianmaria Buccellati as Honorary President and his son Andrea Buccellati as CEO.
Source: CPP Luxury
Speculation: PPR, Pomellato
PPR is said to be close to acquiring a majority stake in Pomellato SpA, a midsize Italian jeweller known for its coloured stones, in a deal that could value the Italian company at about €350 million.
Acquired: Illum, La Rinascente
Italian department store La Rinascente has acquired the Illum luxury department store in Copenhagen, Denmark, its first acquisition outside Italy. La Rinascente plans to invest 50 million euros in renovating and redesigning Illum which is due to re-open late 2014.
Source: CPP Luxury
For Sale: Pal Zileri
Owners of Italian suit maker Pal Zileri are looking to sell their holding and bring in external investors to boost the brand’s international expansion and revive its fortunes. The four family shareholders who own 65% of the company are seeking to sell all or most of their holding, ideally to investment funds that already have fashion brands in their portfolio.
Speculation: Moncler, IPO
Moncler is expected to launch an IPO towards the end of 2013, according to investment firm Eurazeo, which has a 32% stake in the company. “We will discuss it further in September. If we decide to go ahead with the IPO, it could happen in the following quarter,” said Eurazeo.
Sold: InterContinental London Park Lane Hotel
InterContinental Hotels Group has agreed to sell its London Park Lane Hotel to Middle Eastern investors for £301.5 million (62% more than book value) as it sharpens its focus on managing properties and brands. InterContinental will continue to run the 447-bedroom hotel under a 30-year contract and can extend that another 30 years.
For more in the series of The Latest Investments, please see our most recent editions as follows:
Published on April 11, 2013 under Markets
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