Valentino label sold for £476m

[modela]

Luxury Italian fashion house Valentino is being sold to an unidentified sovereign wealth fund for €600m (£476m).

The sale comes five years after Valentino was bought by London-based private equity firm, Permira, at the height of the credit bubble together with Hugo Boss, in a holding company called Red & Black.
The fashion house had a tumultuous five years but has once again become widely praised in fashion circles, winning acclaim for shows at Paris Haute Couture Week and its ready-to-wear collections. It is a staple of the Oscars and is worn by stars Florence Welch, Alexa Chung and Keira Knightley.
The current deal, which will separate the Valentino brand from Hugo Boss, will see the design house sold to one of Permira's investors. The sovereign wealth fund has not been identified.

In 2011, Valentino had sales of €322.4m, up 20 per cent from the previous year and earnings before interest, tax, depreciation and amortisation (Ebitda) of €22.2m, up 300 per cent on the previous year.

The company is thought to trade on a multiple similar to that of other luxury goods houses, which can sometimes be valued as high as 30 times earnings. The high ticket price Permira has achieved is expected to please investors, just as the buy-out group works on raising a new €6bn fund.

However, Valentino has not always been so easy to manage for the London-based buy-out group. Bought in 2007, the €3.4bn investment soon faced problems, from the aftermath of its founder Valentino Garavani's departure to the sustainability of the €2.3bn of debt attached to the deal.

The chief executive, Stefano Sassi, brought in designers Maria Grazia Chiuri and Pier Paolo Piccioli, who together have rekindled a Valentino renaissance. Mr Sassi has also been working on pushing the brand into Asia.

Source: telegraph.co.uk/fashion.telegraph.co.uk

 

[GERGIN]

All kinds of craziness!

 

[Chanelcouture09]

Valentino left due to Permira and their managerial skills and their confinement over his creativity, such a shame that in this whole process they forced the founder out of the house and now they've sold it.

I disagree strongly regarding the last statement in the article 'who together have rekindled a Valentino renaissance' I don't think they capture the essence of what Mr Valentino created, for me it's a completely different identity to his whole archive of work, aside from the florals, which again, are on a completely different level to what Mr Valentino created.

I'm hoping that they will however continue to go leaps and bounds and not crumble, because I always worry when situations like this occur that they will end up in the same fate as Pierre Cardin or Elsa Schiaparelli.

 

[Label Basher]

^ Excellent comment. I totally agree. The label has never been the same for me since those two started designing.

I wouldn't mind at all if the new owners replaced them but I doubt it will happen.

 

[saann]

I'm curious about the 20% bump in sales for 2011.. any idea on why? did they open more stores maybe?

Kind of rude to sell the company off after only five years. Especially considering it must have been tough for Valentino to find the right people to sell to in the first place. Maybe it's due to the financial struggles the had with the brand. Is the debt paid off or will it go on to the new buyer?

 

[candlebougie]

Seems to me that Valentino is in a better overall state than a few years ago. Sales are up, the image of the brand has been modernized and a lot of (new) people/customers like the changes. It's probably a good time to sell the company and minimize their losses.

 

[Street_a_Licious]

probably due to the studded shoes and clutches. at least those 2 added another element to their vocabulary of flowers and ruffles and lace.

studs.

 

[Chanelcouture09]

I'm curious about the 20% bump in sales for 2011.. any idea on why? did they open more stores maybe?

Kind of rude to sell the company off after only five years. Especially considering it must have been tough for Valentino to find the right people to sell to in the first place. Maybe it's due to the financial struggles the had with the brand. Is the debt paid off or will it go on to the new buyer?

I would presume it would be due to the increase in accessories and the increased publicity of the brand due to stars like Keira Knightley, Florence Welch & The Fanning sisters, they've have an increased popularity on the red carpet the past 2 years so this has obviously payed off.

By the sounds of the article they have sold on the debt to the new investors, but that would still mean that Permira have came out of the sale with a loss ?

The problem with brands like this when they have a brand such as Hugo Boss as it's sister company, they constantly want to try and push the same profitability onto the brand when in fact that is almost impossible to do, unless they developed a licensing deal to produce cosmetics and more fragrances, of course every brand needs to make a profit but with the right steps and the right strategy and I feel with such a short stint of Permira behind the label the profitability didn't happen just as quick as they wished for.

This quote pretty much sums up the sale of the company 'We have to take of figures, not only style' - Matteo Marzotto.

 

[glitterpeacock]

Despite the financial trouble the brand has seen, I still would have thought that it would sell for more - it is one of the most recognized fashion names surely?

 

[lepetitcouturier]

It was sold to the Qatar royal family, which is kinda convenient because Sheikha Mozah (a HUGE couture collector) is the Emir of Qatar's wife.

 

[kissmesweet]

I'm getting more from Vogue UK:

Updated Thursday July 11, 10.21am: Valentino has now been sold. The company denied that an offer had been accepted following reports in the weekend papers, but has now confirmed that the label has new owners. Mayhoola for Investments S.P.C. - an investment company backed by a major private investor group from Qatar - has acquired Valentino Fashion Group S.p.A. for an undisclosed sum.


"Valentino has always been a brand of unique creativity and undisputed prestige," a spokesperson for new owner Mayhoola added. "We are impressed by the work of the two creative directors, Maria Grazia Chiuri and Pierpaolo Piccioli, and by the management team led by Stefano Sassi. Their ability to blend the aesthetic values of the founder, Valentino Garavani, with a contemporary and sophisticated vision, has been instrumental in enhancing the brand's relevance and establishing a platform with significant future potential. Our vision is to back management for the long term to exploit the full potential of this exciting brand. We believe Valentino is ideally suited to form the basis for a global luxury goods powerhouse."


"We are delighted with this development," Stefano Sassi, CEO of Valentino, said in a statement this morning. "During the past few years, despite swings in the luxury markets, the company has operated with great intensity and remained focused on maximizing the potential of the Valentino brand. This effort should drive a 60 per cent increase in revenues from 2009 to 2012. Our new shareholder will help us to reach our full potential. I would like to take this opportunity to thank the Permira Funds and the Marzotto family for their industrial vision and the support that they have provided to management in implementing the first steps of our long term plan."


The acquisition includes the Valentino label as well as the M Missoni license business.

 

[MyNameIs]

Any chance this sale could lead to the due getting canned?

 

[thejarc]

Haha, the internet is so bitchy, I love it.

But no, I think they helped turning the brand profitable again.

 

[TianSoFine]

My observations:
-The pound is ahead of the euro? I must have missed this, lol.

-Awww, I am rather fond of this duo. It's definitely not the same as Mr. Garavani's aesthetic but the duo's work is getting better and better, and I think they have their own merits. And I can imagine that they wouldn't have felt in the safest position after Facchinetti got fired.

-Is it confirmed that the royal family is Qatar's? It sounds like a deal they would make but I've only heard it as a rumour.

 

[CommanderTMugler]

It was sold to the Qatar royal family, which is kinda convenient because Sheikha Mozah (a HUGE couture collector) is the Emir of Qatar's wife.

OMG! How did I miss your post! I just read that it was the Qatar royal family (they also own Harrods) which kind of made me happy as well because of her, she goes through couture like crazy. I wonder how things will shape up and I can't wait to see her in modified Valentino.