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- 31 Jan 2014
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The Latest Investments: Permira, La Montre Hermès & L'Oreal


Moncler Chairman Remo Ruffini

Moncler makes its stunning public debut, as Kering takes a minority stake in Tomas Maier and La Montre Hermès acquires 100% of Joseph Erard Holdings

Just today Reuters reported that “a scarcity of sellers, combined with a growing number of cash-rich buyers from Asia and the Middle East, mean high-priced takeover deals are set to remain in fashion for the luxury goods industry, despite slowing sales growth.”

And according to their research, the trend shows no sign of slowing. “While luxury brands might have sold for 11-13 times core earnings (EBITDA) in 2011, most are now likely to fetch at least 15-18 times current annual profit.”

Indeed, last December’s flotation of Moncler valued the luxury ski jacket maker at about 20 times this year’s EBITDA, and LVMH’s July acquisition of Loro Piana for 19 times earnings.

 LVMH revealed €3.2 billion of cash on its balance sheet 

LVMH revealed €3.2 billion of cash on its balance sheet during this week’s results presentation, while Richemont had €2.4 billion of disposable cash at the end of March 2013.

The only thing likely to stop consolidation in the luxury industry is a lack of remaining independent luxury brands. Or indeed suppliers, as conglomerates look to protect supply chain by acquiring key components manufacturers and service providers.

Whichever way you look at it, it seems like 2014 will be another interesting year of M&A activity in our industry.

IPO: Moncler

Moncler SpA advanced 47% in the Italian luxury skiwear maker’s first day of trading, the best opening-day performance in 2013 among European initial public offerings of more than $1 billion.

Moncler’s private-equity owners raised about €784 million after selling shares at the top of a targeted range. The institutional offer was more than 31 times oversubscribed, while retail investors sought about 14 times the amount of stock offered.

Source: Bloomberg

Speculation: Permira, Roberto Cavalli

Family-owned Roberto Cavalli has denied recent reports that a sale to private equity group Permira for approximately €450 million was imminent.

Roberto Cavalli said in an emailed statement that the report in Italian weekly Il Mondo was “inaccurate and groundless” and that “…no agreement, not even preliminary, has been signed regarding a hypothetical sale of the group”.

Source: EuroNews

Stake: Tomas Maier, Kering

Kering is investing in Tomas Maier, the eponymous brand of Bottega Veneta’s creative director. The French has formed a joint venture with Maier to develop his brand and expand the product range to a complete lifestyle assortment with a ‘leisure-oriented spirit’.

Source: WWD

Auction: Fisker Automotive

Fisker Automotive Holdings Inc. has won court approval to enter into two stalking-horse agreements as the electric vehicle maker moves to sell substantially all of its assets at a February auction. Under the approved bidding procedures, rival offers are due by Feb. 7 with a $5 million deposit amongst other conditions.

The debtor has not restarted production of its vehicles since a previously scheduled seasonal shutdown began in July 2012.

Source: The Deal

Acquired:, Luxottica

Luxottica Group S.p.A. announced that it has entered into an asset purchase agreement to acquire from WellPoint Inc. subject to customary closing conditions. Luxottica plans to invest in innovations to create an enhanced online experience that will be accessible to the independent practitioners in North America.

Source: Luxottica

Capital: France Croco, Kering

Following the French luxury conglomerate’s acquisition of France Croco in 2013, Kering is set to invest €15 million into the construction of a new tannery. According to a source close to Kering, there are plans in the making to construct a new tannery in Périers, Normandy.

Source: Fashion United

Acquired: Bruno Magli, Da Vinci Invest

Switzerland’s Da Vinci Invest has bought Italian luxury leather brand Bruno Magli from London-based hedge fund Fortelus, for an undisclosed amount.

Bruno Magli’s new chief executive Manfred Ebensberger said the new ownership would help the shoe, bag and clothing maker accelerate plans to expand its product range and develop its wholesale network worldwide.

Source: Reuters

Joint Venture: Shiseido , Creation Alexandre Miya Paris

Shiseido said Thursday it has established a new Dubai-based joint venture with its existing Middle East distributor to import and market beauty products in Bahrain, Jordan, Kuwait, Oman, Saudi Arabia, Qatar and the United Arab Emirates.

Shiseido’s French subsidiary Shiseido International Europe will control 51 percent of the new joint venture while Creation Alexandre Miya Paris Limited, which already sells Shiseido products in these markets, will hold the remaining 49 percent.

Source: WWD

Speculation: Carita, Decléor, L’Oréal

L’Oréal is in talks with Shiseido Co. Ltd. to acquire the Carita and Decléor brands from the Japanese company for 230 million euros, or about $314 million at current exchange.

The two French-born skin-care brands are housed in the Shiseido Professional Division, and are distributed in both the professional and retail channels, particularly in Europe.

Source: WWD

Offer: Morgans Hotel Group, Yucaipa

Morgans Hotel Group – operator of the Delano South Beach and Mondrian Los Angeles – has confirmed an unsolicited and conditional proposal from The Yucaipa Companies, to acquire the group for $8.00 per share.

The Company’s Board of Directors will review the proposal with its financial and legal advisors and determine the appropriate response in due course.

Source: Hospitality Net

Stake: Gallimard, LVMH

LVMH Moet has purchased a 9.5% stake in debt-ridden Madrigall, the holding company controlling prestigious family-owned French publisher Gallimard. The luxury group reportedly paid between €25 and €30 million for the stake. The Gallimard family will maintain control of the publishing group.

Source: 4 Traders

Acquired: Joseph Erard Holding, La Montre Hermès

In full agreement with its partner, La Montre Hermès SA has announced the acquisition of the entire share capital of Joseph Erard Holding, in which it was already the major shareholder. For the Hermès group, this operation is part of its on-going process in mastering its watchmaking expertise.

Souce: WtheJournal

Speculation: Mayhoola, Pal Zileri

Italian media outlets have reported that Qatar’s Mayhoola Investment – owners of Valentino – is in advanced negotiations with luxury menswear house Pal Zileri, for a 65% stage.

The company has been looking for a strategic partner since 2008 to finance global retail expansion, especially through directly operated stores.

Source: CPP Luxury

For more in the series of The Latest Investments, please see our most recent editions as follows:

- The Latest Investments: LVMH, Chloé & Moncler
- The Latest Investments: Neiman Marcus, Kering & Hermès
- The Latest Investments: Richard Mille, Loro Piana & Porsche


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